Strategic Shopping: Planning for the 2014 Sales Tax Holidays

Posted on 07/21/2014

It may seem like the smoke has barely cleared from those 4th of July fireworks, but believe it or not, it's time to start talking about back to school shopping. Back to school is a $72 billion shopping season according to the National Retail Federation. And besides clipping coupons or watching for sales, with a little strategic shopping you can also save with tax-free holidays.

Who's Offering
Not every state offers a sales tax holiday, but roughly one-third do. If you already live in Alaska, Delaware, Montana or one of the other states that either doesn't have a state sales tax or exempts popular back to school items like clothing, this isn't a big deal for you. But states from Alabama to Virginia and plenty of places in between are giving shoppers an automatic discount in the form of zero sales tax.

First Weekend in August
The first weekend in August, which runs from August 1-3 this year, seems to be the most popular pick for states that are taking part in a tax-free holiday. In all, 12 states will hold their tax free holidays throughout this weekend.

Review the Rules
Just like kids need to study up for their exams, it's important to review the rules for the sales tax holiday, too. Some states set spending limits. For instance in Georgia only clothing up to $100 is exempt from sales tax and computers must cost less than $1,000.

Best Bargains
Of course the sales tax on a college-ruled notebook is probably less than a dime, which isn't a very significant savings. But if a high ticket item like a computer is on your back to school shopping list, then waiting for the tax holiday is definitely a smart move. You can save as much as $88 in states like Louisiana where the statewide sales tax is 8.89%. In fact Louisiana's sales tax holiday exempts any individual item as long as it costs less than $2,500.

Don't Go to Extremes
The sales tax holiday isn't a good reason to go to great lengths to cross state lines, since no matter where you are it's a savings of less than 10%. And make sure you don't go into a tax-free frenzy, buying more than you would otherwise. Overspending will wipe out any savings the tax-free weekend offers.

By Alison Storm

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