As students head into the home stretch of summer vacation, shoppers in several states, including Tennessee, can expect sales tax breaks on the purchase of various school-related goods in upcoming weeks. States holding these “tax holidays” temporarily drop state sales tax collections on back-to-school items such as clothing, footwear, school supplies, computers and certain other products. However, local sales taxes may still be imposed in some communities.
Tax-free Tennessee was developed for August to help parents buying back to school supplies save some money.
States enjoying sales tax holidays this weekend, August 3-5, include Tennessee, North Carolina and Virginia.
Tax-free weekend in Tennessee kicks off at 12:01 a.m. Friday, Aug. 3, and runs through 11:59 p.m. Sunday, Aug. 5. Everything from binders and book bags to calculators and computers are exempt from sales tax for this weekend only. Exempt items include clothing $100 or less, school supplies $100 or less, and computers, $1,500 or less.
Examples of tax-free school items include binders, bookbags and backpacks, chalk, crayons, erasers, folders, glue, lunch boxes, notebooks, paper, pens, pencils, rulers, scissors, tape and school art supplies such as paints, paintbrushes, sketch and drawing pads, and watercolors.
In the clothing line, most of the basics are included like shirts, underwear, socks and jeans. Accessories are a little tougher. A belt for example is tax-free but if you bought just the buckle, that’s not tax-free.
If you’re looking for a new computer system — that’s a CPU, monitor and keyboard — and it’s under $1,500 this weekend, it’s tax-free.
But if you’re just wanting to buy new speakers, a new keyboard or just a monitor, that’s all taxable, as are compact discs, printers and printer ink.
In North Carolina, the following are exempt: clothing and school supplies with a sales price of $100 or less per item; school instructional materials with a sales price of $300 or less per item; sport/recreational equipment with a sales price of $50 or less per item; computers with a sales price of $3,500 or less; and computer supplies with a sales price of $250 or less per item. The exemption does not apply to clothing accessories, any item sold for use in a trade or business, educational software, furniture, luggage, stereo equipment, DVD players, and similar equipment, or protective equipment.
Virginia’s tax-free holiday items include clothing and footwear with a sales price of $100 or less per item and school supplies with a sales price of $20 or less per item are exempt.
The annual sales tax holidays in Tennessee were established by the Tennessee Legislature in 2006. The first sales tax holiday was August 4-6, 2006, saving Tennesseans about $15 million. Since then, Tennesseans have enjoyed $8 to $10 million in tax savings each holiday. This year, families with children in kindergarten through 12th grade are expected to spend $688.62 on average for back-to-school items, according to the National Retail Federation. That’s up from last year’s tally of just under $604.