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Texas Bill Proposes Tax Free Shopping Day for Small Businesses

  • Mar 23, 2015 | Gail Cole

 Main Street, Grapevine, Texas.

Small businesses throughout America are struggling to hold their own against big box stores and internet retailers. To help compete against Big Box Black Friday sales (the kind that have been known to trigger stampedes) and the success of Cyber Monday, Small Business Saturday was created* in 2010. Now Texas lawmakers are proposing a bill that would give small businesses a further boost on that day—tax-free shopping.

Texas House Bill 2694 would exempt from state sales tax “items sold by certain businesses in this state during Small Business Saturday.” To be considered a ‘small business,’ the following must be true:

  • All business locations must be in Texas.
  • The retailer must not have collected more than $312,500 in sales tax during the 12-month period ending September 30 of that year.

Retailers that have been in business for less than 12 months are eligible to participate in Small Business Saturday if they have collected and remitted “not less than $50,000 or more than $312,500” in sales tax.

Tangible personal property sold by eligible retailers and costing $5,000 or less is exempt from state sales tax during Small Business Saturday. Sales tax applies to tangible personal property costing more than $5,000. Local sales tax would apply to all purchases.

State Representative Dwayne Bohac, sponsor of the bill, said that when he ran a small business, “We kind of dreaded Black Friday, because we knew customers would be flooding to the big-box stores.” It is time, he said, “To let the little dogs eat” (Statesman).

If approved, the Texas Small Business Saturday sales tax exemption will take effect September 1, 2015. Small Business Saturday is scheduled for November 29, 2015.

Sales tax holidays can spark sales but they can also create headaches for retailers. Implementing sales tax Software-as-a-Service facilitates transaction tax management in all states, even during tax-free periods. Learn how it works.

Small Business Saturday was created by American Express.

 Photo credit

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.