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State Tax Holidays Offer Back-to-school Relief, CCH Says
(RIVERWOODS, ILL., July 21, 2009) – Back-to-school shopping will be tax-free on various dates this July and August in fifteen states, according to CCH, a Wolters Kluwer business and a leading provider of tax, accounting and audit information, software and services (CCHGroup.com). During these “tax holidays,” back-to-school items such as clothing, footwear, school supplies, computers and, in a few states, many other items may be purchased free of state sales tax. Local sales taxes may continue to be imposed in some places, however.
“Although states are facing serious budget issues, generally they seem to be reluctant to cancel their tax holidays as a way to increase revenue,” said Daniel Schibley, CCH senior state tax analyst. “In fact, ‘hard times’ may be seen as a justification for these holidays, both as ‘relief’ for hard-pressed consumers and ‘stimulus’ for hard-pressed retailers. On the other hand, the District of Columbia has cancelled its traditional August back-to-school holiday, citing the potential loss of $640,000 in tax revenue."
This year, Mississippi has joined the ranks of states offering a tax holiday timed for back-to-school purchases. Massachusetts has not yet enacted a budget, so an August tax holiday is still a possibility. Its 2008 mid-August holiday was not signed into law until August 1 last year.
2009 Back-to-school Holidays
Holidays timed for back-to-school shopping begin as early as July 31 this year. While some limit the exemption to clothes and shoes, others, such as those in Louisiana and Vermont, are quite broad in their reach, covering a wide range of personal items.
Alabama: On August 7-9, the following are exempt: clothing with a sales price of $100 or less per item; single purchases, with a sales price of $750 or less, of computers, computer software, school computer equipment; noncommercial purchases of school supplies, school art supplies, and school instructional materials with sales price of $50 or less per item; noncommercial book purchases with sales price of $30 or less per book are exempt from tax. Does not include clothing accessories or protective or recreational equipment.
Connecticut : On August 16-22, clothing and footwear costing less than $300 per item are exempt. Does not include accessories or athletic or protective clothing.
District of Columbia : Has cancelled its August holiday. A holiday for November 27-December 6, when clothing, footwear, accessory items and school supplies costing $100 or less per item are exempt has not yet been cancelled.
Georgia : On July 30-Aug. 2, noncommercial purchases of school supplies (up to $20 per item), clothing or footwear ($100 or less per article or pair) and personal computers and related accessories (single purchases of $1,500 or less) are exempt.
Iowa : On August 7-8, clothing and footwear with sales price of less than $100 per item are exempt. Does not include accessories, rentals, athletic or protective clothing.
Louisiana : On August 7-8, the first $2,500 of sales price of noncommercial purchases (not leases) of items of tangible personal property (not vehicles or meals) is exempt. Does not apply to local taxes (may be allowed in St. Charles Parish).
Mississippi : On July 31-August 1, clothing and footwear with sales price under $100 per item are exempt. Does not include accessories, rentals, skis, swim fins or skates.
Missouri : On August 7-9, noncommercial purchases of clothing (but not accessories) with taxable value of $100 or less per item; school supplies up to $50 per purchase; computer software with taxable value of $350 or less; computers and computer peripherals up to $3,500 are exempt. Localities may opt out. If less than 2 percent of retailer’s merchandise qualifies, retailer must offer a refund of sales tax paid if the customer requests one, in lieu of tax holiday.
New Mexico : On August 7-9, footwear and clothing with sales price of less than $100 per item; school supplies; computers with sales price of $1,000 or less per item; and computer peripherals with sales price of $500 or less per item are exempt. Retailers are not required to participate. Does not include accessories, athletic or protective clothing.
North Carolina: On August 7-9, clothing and school supplies with sales price of $100 or less per item; school instructional materials with sales price of $300 or less per item; sport/recreational equipment with sales price of $50 or less per item; computers with sales price of $3,500 or less; and computer supplies with sales price of $250 or less per item are exempt. Does not include clothing accessories or protective clothing.
Oklahoma : On August 7-9, items of clothing and footwear with sales price of less than $100 are exempt. Does not include accessories, athletic or protective clothing or rentals.
South Carolina: On August 7-9, clothing (but not rentals), clothing accessories, footwear, school supplies, computers, printers, printer supplies, computer software, bath wash clothes, bed linens, pillows, bath towels, shower curtains and bath rugs are exempt.
Tennessee: On August 7-9, clothing (but not accessories), school supplies and school art supplies with sales price of $100 or less per item and computers with sales price of $1,500 or less per item are exempt.
Texas : On August 21-23, clothing and footwear and school backpacks with sales price of less than $100 per item are exempt. Does not include accessories, athletic or protective clothing or rentals.
Vermont : On August 22 items of tangible personal property sold to individuals for personal use at a sales price of $2,000 or less are exempt. A similar holiday is scheduled for March 6, 2010.
Virginia : On August 7-9, clothing and footwear with selling price of $100 or less per item; school supplies with selling price of $100 or less per item; and school supplies with selling price of $20 or less per item are exempt.
Holidays for Varied Purposes
In addition to holidays timed for back-to-school buying, usually restricted to back-to-school items, a number of states have enacted tax holidays to promote other kinds of purchases.
Energy efficiency is the most common theme. Missouri and Texas have already held energy-efficiency holidays, in April and May of this year respectively. Georgia, North Carolina, Virginia and West Virginia have such holidays scheduled for this fall.
Louisiana and Virginia continued to hold tax holidays for hurricane-preparedness supplies in the spring of this year. Florida had such a holiday in 2007, but dropped it last year.
Two states have firearms-related tax holidays. Louisiana’s covers firearms, ammunition, and a broad range of “hunting supplies” and will be held each year on the first consecutive Friday through Sunday of September. South Carolina provides an annual tax holiday for sales of handguns, rifles and shotguns during what the legislature dubbed “Second Amendment Weekend” – the Friday and Saturday following Thanksgiving.
About Daniel Schibley
Daniel Schibley is an attorney and state tax analyst who specializes in tracking, analyzing and reporting on new developments and trends in state tax issues. A former practicing attorney and assistant professor of law, Schibley is a leading authority on Streamlined Sales Tax Project activities.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading products are The ProSystem fx® Suite, CCH® TeamMate, CorpSystem®, CCH® IntelliConnect™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. The company provides products and services for professionals in the health, tax, accounting, corporate, financial services, legal, and regulatory sectors. Wolters Kluwer had 2008 annual revenues of €3.4 billion, employs approximately 20,000 people worldwide, and maintains operations in over 35 countries across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Visit www.wolterskluwer.com for information about our market positions, customers, brands, and organization.
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