Taking Advantage of 2012 Summer Sales Tax Holidays

Posted on 07/26/2012

States from Alabama to Virginia have sales tax holidays coming up, just in time for back-to-school shopping. According to the Federation of Tax Administrators, 17 states are giving shoppers tax breaks during weekends in August or September. (http://www.taxadmin.org/fta/rate/sales_holiday.html) Take full advantage of this savings with these simple tips.

Find Out State Rules
Every state’s rules regarding the sales tax holiday seem to be slightly different. It’s important to know the policy before you hit the stores. One example is in Alabama where you can buy a belt and not pay tax, but if you buy a belt buckle you’ll be taxed.

Research Limits
Every state has certain limits on the value of products that are taxable. In Alabama computers aren’t taxable unless they cost more than $750. But in North Carolina, that limit jumps up to $3,500 for computers. Research those limits before you hit the stores so you know what you can spend while still taking advantage of the tax savings.

Combine Sales and Discounts
Just because you’re saving some money by avoiding sales tax doesn’t mean you shouldn’t still try to get the best deal possible. Combining the sales tax holiday with coupons or retailer discounts is a great way to take your bargain hunting to the next level by saving even more cash.

Print the Rules
While most major retailers should be prepared for the sales tax holiday, you may run into some that are still trying to charge tax. Print out your state’s rules before you hit the stores in case you encounter a clueless cashier.

Consider Crossing the Border
Some states don’t limit your purchases to clothing and backpacks. For instance, in Louisiana, as long as your purchase costs less than $2,500 you’ll get the tax break during the holiday. For those who live in neighboring states, that deal may be good enough to cross the border if you’re making a big purchase. Meals, vehicles and services aren’t included in the discount.

Don’t Go Crazy
While the sales tax holiday is definitely a nice break for cash-strapped families, it’s not a windfall. Most states charge between 4-7.3% sales tax which is a good savings, but be careful not to let it cloud your shopping judgment. If you end up spending way more than you would have normally then the sales tax holiday isn’t helping your back-to-school budget go further—it could actually be costing you more.

By Alison Storm

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Posted on 02.02.13 at 7:47 PM

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