Texas 2015 Energy Star Sales Tax Holiday, Memorial Day Weekend
- Sales Tax News
- May 22, 2015 | Gail Cole
Texans who shop for Energy Star products this weekend will get a break from sales tax. The Texas 2015 Energy Star Sales Tax Holiday takes place Memorial Day Weekend, from 12:01 a.m. Saturday, May 23 to 11:59 p.m. Monday, May 25.
The following Energy Star products are exempt from Texas sales tax during the tax-free period:
- Air conditioners priced at $6,000 or less
- Ceiling fans
- Clothes washers (dryers are not labeled by Energy Star)
- Incandescent and fluorescent light bulbs
- Programmable thermostats (if there is any stock – Energy Star no longer labels these)
- Refrigerators priced at $2,000 or less
The tax-free period does apply to internet, mail-order and phone sales of qualifying products, provided one of the following conditions is met:
- “The item is paid for and delivered to the purchaser during the exemption period.
- The purchaser orders and pays for the item and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period.”
Lay it away
The sales tax holiday applies to qualifying layaway items provided one of the following conditions are met:
- Final payment is made and the buyer receives the merchandise during the sales tax holiday. OR
- The item “is selected by the customer and the order is accepted into layaway by the retailer during the exemption period for immediate delivery upon full payment, even if delivery is made after the exemption period.
Delivery charges that are “included as part of the sales price of qualifying products sold during the holiday” qualify for the exemption from Texas sales tax. This is true even if the delivery charges are separately stated.
However, the Comptroller notes that “delivery and/or installation charges billed in connection with the sale of air conditioners and refrigerators may disqualify some of those products from the exemption.” This could occur if delivery and or installation charges raise the total sales price above the price cap.
Installation charges qualify for the exemption so long as the qualifying item is installed in residential property and remains free-standing or mobile after installation (and therefore defined as tangible personal property). If the item is permanently attached to a building structure, it becomes an improvement to real property instead of tangible personal property. In that case, installation charges do not qualify for the exemption.
Labor charges on new construction and residential repair are not subject to sales tax in Texas. However, Texas sales tax applies to nonresidential repair and remodeling services. Additional details are available through the Texas Comptroller. See also the press release reminding taxpayers of the upcoming tax-free period.
Sales tax holidays are great for consumers but create extra work for retailers. Point-of-sales systems must be altered, employees trained. Implementing an automated sales tax solution facilitates transaction tax management and increases compliance. Learn how it works.