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By Suzanne Blake
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Millions of Americans are preparing for one of the busiest shopping weekends of the year this back-to-school season.
Luckily for shoppers, several states temporarily suspend sales taxes on eligible purchases, allowing shoppers to save money on everything from school supplies and clothing to computers and other back-to-school essentials.
Missouri, Ohio, Oklahoma, South Carolina, Texas and Virginia are among the states holding tax-free weekends beginning this weekend, according to the Federation of Tax Administrators, while Iowa is also participating through a shorter two-day event.
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Florida and Illinois also currently have separate active tax-relief periods underway.
Why It Matters
These tax-free shopping weekends can provide some financial relief for consumers, particularly families battling the cost of living to prepare for the new school year.
Inflation is continuing to affect household budgets, but tax-free periods can reduce the overall cost of necessary purchases, especially in states where combined state and local sales tax rates add significantly to a shopping bill.
When Does Tax-Free Weekend Start?
Most of this weekend's tax-free events begin on Friday, August 7, and run through Sunday, August 9, although Iowa's sales-tax holiday ends on August 8.
Keep in mind, the state-specific dates and qualifying items vary.
List of States Included in Tax-Free Weekend
The following states are offering traditional back-to-school tax holidays this weekend:
“One tactic some states have used over the last decade to ease the back-to-school cost burden for families is to have certain days where select items are tax free. This can save families and educators money when preparing for a new school year,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
However, if your state does provide a tax-free holiday, shoppers should be mindful of not just the dates it falls on, but also the dollar limit amounts per item, Beene said.
“While some states do revise figures, others are still going on dollar limits established years ago, and with inflation impacting many goods, you could find yourself paying tax for items that go above the threshold for tax-free status,” he added.
List of States Offering Active Relief Periods
In addition to the weekend tax holidays, two states currently have broader tax-relief periods underway:
Unlike most states participating this weekend, Illinois' program is not a full exemption. Instead, the state's sales tax rate on eligible items is reduced.
Sales tax holidays can help families, but the savings are usually modest, according to Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com.
If the combined sales tax rate is 7 percent, a family spending $500 on qualifying back-to-school purchases saves around $35.
“That matters, but families should still shop the price first and the tax break second,” Ryan told Newsweek.
“The catch is that every state writes its own rules. Clothing, computers, backpacks and school supplies may have different dollar limits. And some local taxes or products may be treated differently.”
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List of Items Included in Tax-Free Weekend
The eligible purchases for tax-free weekend vary by state, but participating states generally exempt categories such as:
- Clothing and footwear below specified price limits
- School supplies
- Backpacks
- Computers and computer accessories (in some states)
- Instructional materials and learning aids (in certain states)
Texas exempts most clothing, footwear, school supplies and backpacks priced under $100.
Meanwhile, Virginia exempts school supplies, clothing and footwear under specified amounts while also including certain emergency preparation and energy-efficient products.
South Carolina offers one of the broadest programs, covering clothing, school supplies and computers.
“The best strategy is to make the school list in advance, check the state's qualifying-item and price limit rules, and compare actual sale prices. A 20 percent retailer discount is worth far more than avoiding a 6 percent or 7 percent sales tax,” Ryan said.
“The mistake is buying something you weren't planning to buy simply because the tax disappeared for a weekend. A tax holiday only saves money when the purchase already made sense.”
What Doesn't Qualify for Tax-Free Weekend
Many purchases will still remain subject to sales tax even during holiday periods. This includes:
- Items exceeding state price limits
- Jewelry and accessories in some states
- Athletic equipment
- Business-use purchases
- Products outside designated categories
Each state sets its own exemption rules, meaning an item that qualifies in one state may not qualify in another.
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Do Tax-Free Sales Work Online?
Tax-free exemptions generally apply to qualifying online purchases when the item is shipped to an address in a participating state during the applicable sales-tax holiday period.
Retailers are expected to apply the exemption based on the customer's destination state rather than the seller's location. That means consumers can typically take advantage of tax-free savings whether shopping in stores or online, as long as the purchase meets state requirements.
What Happens Next
Shoppers in participating states have a limited window to take advantage of back-to-school tax breaks before many of the exemptions expire at the end of this weekend.
Contact Newsweek editors on this story: Kate Nalepinski, Trevor Davies, Sam Wilson.
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