A sales tax holiday can, in theory, apply to anything normally subject to sales tax. That said, most sales tax holidays apply only to items purchased for personal use, and most follow a certain theme.
Clothing and school supplies are typically exempt during back-to-school sales tax holidays. Supplies that can help residents minimize the harmful effects of severe weather are exempt during hurricane-preparedness or disaster-preparedness tax-free weekends. There are also sales tax holidays for energy-efficient appliances, water-saving products, and firearms, ammunition, and hunting supplies.
Recent years have seen sales tax holidays go outside these boxes. For instance, Florida now typically provides temporary sales tax exemptions for admissions, outdoor recreation supplies, and tools. Other states have provided gas tax holidays or temporary sales tax exemptions for groceries and/or prepared food.
Most states set price restrictions for their sales tax holidays, but some don’t. Some have price caps for certain products but not others. See the state-specific information above for more details.
Whether a layaway sale qualifies for a tax-free period depends on the state and the circumstances.
In Missouri, for instance, eligible items placed on layaway don’t qualify for the back-to-school tax-free weekend if the final payment is made after the holiday concludes. However, eligible items placed on layaway prior to the holiday period do qualify for the exemption when the final payment is made during the sales tax holiday.
Layaway sales do not qualify for the Massachusetts sales tax holiday.
Consumers can generally return an item purchased tax free and exchange it for a similar item priced the same or less without paying any additional sales tax. But specific policies vary by state and situation.
If a consumer buys an item tax free during a West Virginia sales tax holiday and exchanges it for the same item in a different size or color, the retailer shouldn’t charge them sales tax. If, instead, the consumer later returns it for a credit on the purchase of a different item, the retailer must charge sales tax on the newly purchased item.
If a consumer buys an eligible item before the sales tax holiday then returns it during the sales tax holiday and receives credit on the purchase of a different qualifying item, no sales tax is due on the new transaction. The retailer must provide the consumer credit for the purchase price and the sales tax paid on the returned item.
Shipping, handling, and delivery charges may or may not be exempt during sales tax holidays; as always, it depends on the state.
Where delivery, handling, and shipping charges are considered part of the sales price, as in Texas, they’re exempt as long as the total cost of the product and shipping remain under any applicable price caps. A pair of shoes selling for $99 would qualify for the exemption, but if the shoes are shipped and a $5 shipping charge applies, the total price would jump to $104 and the shoes would not qualify for the Texas sales tax holiday.
However, during the Connecticut sales tax holiday, “adding shipping and delivery charges to an item of clothing or footwear costing less than $100 does not make the item taxable, even if the price of the item exceeds $100 after the shipping and delivery charges are added.”
They can. Sales tax holidays are usually mandatory for all registered retailers in most states, including retailers located in different states or countries.
Policies vary by state.
In South Carolina, for example, the time in South Carolina governs the sales tax holiday. Yet in states that are members of the Streamlined Sales and Use Tax Agreement, the time zone of the seller’s location determines the beginning and end of the sales tax holiday.
So, say a West Virginia sales tax holiday starts on Friday, August 1, at 12:01 a.m. If a West Virginia resident hops online at 1:00 a.m. and purchases a qualifying item from a retailer located in California, the retailer would need to collect sales tax because for the retailer it would be Thursday at 10:00 p.m.
Here again, policies differ from state to state. Some states generally allow retailers to absorb sales tax; others prohibit retailers from paying the tax for their customers.
Texas allows retailers to pay the sales tax on nonqualifying items for customers. Those that do must indicate that they’re paying sales tax for customers and may not imply or indicate that nonqualifying items are exempt or excluded from sales tax.
Connecticut is one state where it’s against the law for a retailer to absorb sales tax.
At any time, a state may create a new sales tax holiday, renew an expiring tax-free period, or amend or repeal an existing sales tax holiday.
In 2024, for example, Florida enacted several new sales tax holidays, New Jersey repealed its tax-free weekend, and Ohio expanded its sales tax holiday.
During 2025 legislative sessions, new sales tax holidays were considered in 16 states:
Back-to-school sales tax holidays: Florida, Illinois, Kentucky, Louisiana, Minnesota, New Jersey, and New York
Boating fuel sales tax holiday: Florida
Disaster preparedness sales tax holidays: Arkansas, Florida, Mississippi, Oklahoma
Firearm safety and storage devices sales tax holidays: Arkansas and Kentucky
Second Amendment sales tax holidays: Alabama, Florida, Minnesota, Ohio, South Carolina, Texas
Small business sales tax holiday: Hawaii
Tools sales tax holiday: Florida
Miscellaneous sales tax holidays: Florida, New York, Rhode Island
Florida ended up creating two sales tax holidays plus several permanent sales tax exemptions. What else 2025 will bring is anyone’s guess, but knowing which states offered tax-free weekends in the past can give an idea of what may happen in the future.
It’s critical retailers not charge customers sales tax on eligible items during a sales tax holiday while continuing to collect sales tax on products that don’t qualify for the temporary sales tax exemption.
Getting sales tax right during sales tax holidays can be extremely challenging and costly for retailers. According to a survey of 500 small and midsize U.S. retailers conducted by Censuswide in August 2024:
73% of respondents reported difficulties in complying with sudden sales tax holiday changes
60% of retailers have struggled to make a profit due to sales tax holiday complexities
58% said their business spends at least $10,000 annually preparing for sales tax holidays
57% hire temporary staff to handle the increased demand and compliance rush
53% pay their employees overtime
The burden is real. Fortunately, automating sales tax calculation, collection, and remittance can help. Learn more at avalara.com.
