July 2016 sales tax holidays

July 2016 will close with sales tax holidays in Georgia, Mississippi, and Tennessee. Is your business prepared?

Rules regarding tax-free periods vary from state to state, sometimes subtly so. For example, Georgia and Mississippi exempt qualifying items costing $100 or less, while items must be priced under $100 to qualify for the exemption in Mississippi and Tennessee. Layaway sales in Mississippi do not qualify for the holiday, while qualified items previously placed on layaway are exempt in Tennessee when the final payment is made during the holiday, and Tennessee allows an exemption for items placed on layaway during the holiday when final payment is made after its conclusion. Helmets qualify for an exemption during the Georgia holiday but are taxable during the Tennessee tax-free period.  Quirks like these complicate compliance for sellers doing business in multiple states.

Georgia

The Georgia tax-free period for clothing, computers and school supplies runs July 30 - 31. The following qualify for an exemption from sales and use tax during the 2-day back-to-school holiday:

• Clothing and footwear with a sales price of $100 or less per item, including:
  • Antique and vintage clothing
  • Athletic clothing
  • Costumes
  • Football pads, knee pads and shin guards
  • Helmets
• Computers with a sales price of $1,000 or less, including
  • Computer batteries and cables
  • Car adaptors for laptops
  • Data storage devices
  • Printers and scanners
• School supplies with a sales price of $20 or less per item, including
  • Binders and notebooks
  • Book bags
  • Calculators
  • Composition books and paper
  • Crayons, pencils, pens
  • Textbooks and workbooks

Taxable items include:

• Clothing:
  • Baby bids and crib blankets
  • Handbags and handkerchiefs
  • Hard hats
  • Personal flotation devices
• Computer:
  • Cases for electronic devices
  • Computer bags
  • Copy machines
  • Surge protectors
• School supplies:
  • Briefcases
  • Envelopes
  • Supplies used in trade or business

Mississippi

Mississippi’s sales tax holiday for clothing and footwear also runs July 29 – 30. Only qualifying items with a sales price of under $100 are eligible for the exemption. Qualifying items include but are not limited to:

Clothing (priced under $100):

• Bowling shirts
• Cowboy boots
• Flip-flops
• Religious clothing
• Suspenders
• Tennis skits

Taxable items include, but are not limited to:

• Baby bibs
• Baseball cleats
• Fishing boots
• Gloves
• Sports pads
• Wet and dry suits

Tennessee

The Tennessee annual sales tax holiday normally starts the first Friday in August. In 2016, however, the tax-free period runs July 29 – 31.

A variety of clothing and school supplies with a sales price of $100 or less qualify for the exemption. These include, but are not limited to:

• Aerobic clothing
• Baby diapers and receiving blankets
• Bathing suits
• Clerical vestments
• Corsets
• Cellophane tape
• Chalk
• Glue, paste and paste sticks

Computers (including notebooks, laptops and tablets) costing $1,500 or less are also exempt.

Taxable items include, but are not limited to:

• Bridal apparel (other than gowns or veils)
• Briefcases
• CDs or diskettes (computer storage media)
• Helmets
• Printers
• Protective equipment
• School computer supplies

Learn about other 2016 sales tax holidays here.

Compliance

Having access to accurate information is a crucial component to sales and use tax compliance.  Sales tax software-as-a-service (SaaS) allows businesses to efficiently and effectively adjust point of sale systems in response to sales tax rate, rule, and product taxability changes, such as those caused by sales tax holidays.  Learn more.