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Sales tax holidays in 2018


Last updated 4.27.2018

More than a dozen states offer sales tax holidays every year — limited periods of time during which specific products are exempt from state, and in some cases local, sales tax. These typically range in duration from one weekend to one week.

While consumers often enthusiastically embrace tax-free periods, retailers may feel more ambivalent about them. Sales tax holidays tend to bring more bodies through the door (or clicks to the website), and can boost overall sales while they last. Yet they also complicate sales and use tax compliance, especially for businesses that sell affected items in multiple states. For example, states may have different price restrictions on the same items, and different policies on delivery charges, layaway sales, rain checks, etc. On top of all that, point-of-sale systems must be altered to account for the tax change, and then returned to normal.

Some state laws provide for annual tax-free periods. In other states, sales tax holidays are one-time events, though they may be adopted year after year. Annually recurring sales tax holidays are less likely to change than one-off holidays, though all tax-free periods are subject to change at any time.

While a few states offer a general sales tax holiday, during which most types of products are tax exempt, it’s more common for states to exempt specific products at specific times. Back-to-school sales tax holidays are generally held during the summer, prior to the start of the school year. Second Amendment sales tax holidays are typically held during or prior to the fall hunting season. Disaster preparedness holidays are offered before the start of storm seasons, and so forth.

Below is a list of 2018 sales tax holidays. The most up-to-date links to state information are provided. However, many state tax authorities don’t release information about the year’s tax-free periods until closer to the date of the holiday. Check back to this blog for updated information as the year progresses.

2018 sales tax holidays

Alabama

                    o  Portable generators priced $1,000 or less

                    o  Variety of supplies priced $60 or less

                    o  Clothing priced $100 or less

                    o  Computers, computer software, and school computer supplies priced $750 or less

                    o  School supplies priced $50 or less

                    o  Books priced $30 or less

  • The Alabama sales tax holiday applies to state sales tax. Counties and municipalities may participate, but they aren’t required to.

 

Arkansas

                    o  Clothing priced less than $100

                    o  Clothing accessories and equipment priced less than $50

                    o  School supplies (no price restriction)

  • Applies to state and local sales tax

 

Connecticut

                    o  Qualifying items priced less than $100

                    o  Applies to state sales tax only (Connecticut has no local tax)

 

Florida

                    o  Batteries (AAA-cell through D-cell, 6-volt, and 9-volt) priced $30 or less

                    o  Gas or diesel fuel tank priced $25 or less

                    o  Ground anchor system or tie-down kit priced $50 or less

                    o  Food cooler, non-electric priced $30 or less

                    o  Portable generator priced $750 or less

                    o  Portable self-powered light source priced $20 or less

                    o  Portable self-powered radio, two-way radio, or weather-band radio priced $50 or less

                    o  Reusable ice priced $30 or less

                    o  Tarpaulin or other flexible waterproof sheeting priced $50 or less

                    o  Applies to state and local sales tax

  • Clothing and school supplies, August 3–5, 2018

                    o  Qualifying clothing and footwear priced $60 or less

                    o  Qualifying school supplies priced $15 or less

                    o  Applies to state and local sales tax

Iowa

                    o  Qualifying items priced under $100

                    o  Applies to state and local sales tax

 

Louisiana     

                    o  The first $1,500 of the price of qualifying items

                    o  Eligible purchases are subject to a reduced state sales tax rate of 3 percent

                    o  Local taxes apply

                    o  The first $2,500 of the price of qualifying items

                    o  Eligible purchases are exempt from state sales tax

                    o  Local taxes apply

                    o  Ammunition, firearms, and hunting supplies

                    o  Qualifying items are exempt from state and local sales tax

  • A reduced rate of sales tax (3 percent) rather than a full exemption has applied to sales tax holidays in Louisiana since 2016. The full exemption is expected to resume starting July 1, 2018. Additional information.

 

Maryland

                    o  Energy Star products (no price restriction)

                    o  Apparel and footwear priced at $100 or less

                    o  For backpacks or bookbags, the first $40 is tax free

 

Mississippi

                    o  Clothing and footwear priced less than $100

                    o  Ammunition, firearms, and hunting supplies (no price restriction)

  • Both holidays apply to state and local sales tax

 

Missouri

                    o  Energy Star products priced $1,500 or less

                    o  Clothing priced $100 or less

                    o  Computers priced $1,500 or less

                    o  School supplies priced $50 or less

  • Both tax holidays apply to state sales tax
  • Local jurisdictions can choose to participate or not

 

New Mexico

                    o  Bookbags, backpacks, maps, and globes priced under $100

                    o  Clothing, footwear, and accessories priced less than $100

                    o  Computers priced up to $1,000 (includes e-readers with computing functions and tablets)

                    o  Computer-related items priced up to $500

                    o  Handheld calculators priced under $200

                    o  School supplies priced under $30

  • Retailers are not required to participate in the back-to-school tax holiday     
  • Retailers are permitted to absorb the tax on non-qualifying items

                     o  Retailers that maintain their primary place of business in New Mexico and employ no more than 10 employees at any one time do not have to charge customers gross receipts tax on qualifying items with a sales price of less than $500.     

 

Ohio

                    o  Clothing priced $75 or less

                    o  School instructional materials priced $20 or less

                    o  School supplies priced $20 or less

  • Applies to state and local sales tax
  • Participation is mandatory
  • This is a one-time holiday

 

Oklahoma

                    o  Clothing and footwear priced less than $100

  • Applies to state and local sales tax

 

Puerto Rico

                    o  School uniforms and footwear

                    o  School materials

  • There is typically another back-to-school sales tax holiday in July, but dates have not yet been released

 

South Carolina

                    o  Clothing and footwear

                    o  Computers, printers and printer supplies, and software

                    o  School supplies

                    o  Select bed and bath items

  • There are no price restrictions on eligible goods
  • Applies to state and local tax

 

Tennessee

                    o  Clothing priced $100 or less

                    o  Computers priced $1,500 or less (excludes software)

                    o  School and art supplies priced $100 or less

  • Applies to state and local sales tax

 

Texas

                    o  Portable generators priced less than $3,000

                    o  Hurricane shutters and emergency ladders priced less than $300

                    o  Specified emergency preparedness supplies priced less than $75

                    o  Energy Star air conditioners priced at $6,000 or less

                    o  Energy Star refrigerators priced at $2,000 or less             

                    o  Specified Energy Star products, no price restriction

                    o  Any WaterSense labeled product may be purchased tax-free during the sales tax holiday

                    o  Applies to purchases for business and personal use

                    o  No price restrictions

                    o  Certain water-conserving products may also be purchased tax-free, but must only be for residential use

                    o  Clothing and footwear priced less than $100

                    o  Specified school supplies and school backpacks priced less than $100 per item

  • All of the above apply to state and local sales tax

 

Virginia

                    o  Clothing and footwear priced $100 or less

                    o  Energy Star and WaterSense products priced at $2,500 or less

                    o  Portable generators priced $1,000 or less

                    o  Gas-powered chain saws priced $350 or less

                    o  Chain saw accessories priced $60 or less

                    o  Specified hurricane and emergency preparedness supplies priced $60 or less

                    o  School supplies priced $20 or less

  • Applies to state and local sales tax

 

Wisconsin

                    o Clothing with a sales price of no more than $75 per item

                    o Computers, laptops, or tablets (purchased for personal use) with a sales price of no more than $750 per item

                    o School computer supplies with a sales price of no more than $250

                    o School supplies with a sales price of no more than $75 per item

  • Applies to state and local sales tax

 

States that may offer a sales tax holiday in 2018

Massachusetts

Sales tax holidays complicate sales tax compliance for retailers in numerous ways. Some examples of the confusion retailers may face include: an item may qualify for the exemption until delivery charges cause it to exceed the price limitation; many sales tax holidays are held during weekends, but while some last Friday through Sunday, some are held Saturday and Sunday, some Friday and Saturday, and some Saturday through Monday; sales tax holidays often only apply to purchases for personal use, not business purchases — but there are exceptions to that rule.

These differing rules and regulations make sales tax compliance particularly challenging for ecommerce businesses that sell to customers nationwide. Getting sales tax wrong during a sales tax holiday, when customers and the state are focused on tax more than usual, could trigger a PR nightmare and potentially an audit.

Tax automation software helps retailers in all states comply with sales tax year-round, taking the pain out of sales tax holidays. Learn more.


Avalara Author
Gail Cole
Avalara Author Gail Cole
Gail Cole began researching and writing about sales tax for Avalara 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.