Maximize Your Shopping with State Tax Holidays

by Kevin on July 29, 2008

Every year in August or September many states grant a weekend or entire week of sales tax holidays. Parents that are doing back to school shopping save a little bit of extra money. Stores usually have sales running at the same time to encourage you to spend with them rather than the competition. Some states also provide tax holidays at other times of the year for energy efficient or disaster preparedness products.

Simply put, it’s a great way to get a pretty nice discount on items you would be purchasing even without the tax holiday. Who doesn’t like an extra 2-5% discount?

Does your state do a state tax holiday?

You may hear advertisements on the radio or television from stores reminding you of their sales on the tax holiday dates. But the easiest way to find out if your state is participating this year is to run a Google search like “(Your State) tax holiday”. For Alabama, the first result is the Department of Revenue’s page with all the information I needed to know what was going on.

Alternatively, you could just check this handy unofficial list I found. I was kind of shocked to see that not every state participates. I suppose the list could not be up to date. i thought this was a really common practice, but judging from the list it doesn’t seem to be.

What items are exempt from state tax?

It all depends on your state. In Alabama, articles of clothing under $100, computers under $750, school supplies under $50, and books under $30 all qualify. Note these are per item costs, not total. For example, you could buy two $85 pairs of jeans and they would still qualify. Two computers at $600 each still qualifies if you purchased them individually.

Alabama has a handy PDF file that explains what is and isn’t exempt.

How much will I save?

Of course that depends on the state sales tax in the state you live in. For Alabama, it is 4%. Georgia is 4%. California is 6.25%. You can find out the different tax rates at Bankrate.

So for me, anything I buy that qualifies this weekend is automatically going to save me 4%. But wait, there’s more.

Some municipalities will also suspend some or all of their sales tax to further incentivize you to spend. In one of our major counties around here they are giving an extra 1% off. Again this will depend state to state, locality to locality, so you need to find your local information.

On top of all that, as I mentioned before, many stores will run sales to encourage you to spend with them.

Don’t Abandon Frugal Practices

The only downside to tax holidays (beside everyone shopping at the same time) is you are encouraged to buy, buy, buy. Like any other sale tactic that stores reguarly use, you need to remember to only buy what you really intended to buy. Just because something is an additional 10% off doesn’t mean it goes in your shopping cart.

If you’re shopping for clothes for the kids, great, do your back to school shopping. But if you wouldn’t normally buy those $85 pair of jeans then don’t. The discount is great, but if you spend double what you budgeted then you’ve lost in the long run.

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Brown Thumb » Blog Archive » Shopping Trip 2008
July 31, 2008 at 2:43 pm
Festival of Frugality #137 | Bargain Briana
August 6, 2008 at 9:44 am

{ 4 comments }

Ashley @ Wide Open Wallet July 29, 2008 at 10:40 am

I’ve never even heard of a state tax holiday. Weird.

Kym July 29, 2008 at 1:41 pm

Wow, where in California is it only 6.25%? I’ve lived in LA, San Diego, and right now the OC and I’ve paid 8.25% in LA, and 7.75% in the other two. And we have no state tax holidays, that I could find. Blah!

Michael Smith July 29, 2008 at 4:37 pm

Also, here in Georgia we’re seeing a lot of retailers combining a big sale with the tax free weekend – like a local shoe store offering a “buy one, get the second of equal or lesser value half-off” sale during tax free shopping days. Great time for us to save on new shoes! (And yes, Kevin, I do really NEED new shoes – I’ve almost got a hole in these soles)

Kevin July 29, 2008 at 10:44 pm

@Kym: The -state- tax was listed at 6.25% in California… that doesn’t include local sales taxes.

@Smith: Yea, yea, we’ve all heard your stories… 🙂

@Ashley: Really?

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