If you’re looking to save money this summer, mark your calendar for the tax-free holiday weekend. Generally held in late July or into August as shoppers load up on back-to-school necessities, tax-free sales weekends are now available in 16 states. But there’s plenty to take advantage of even if you don’t need to prep for the coming school year, including technology, clothing, and more.
Sometimes these are called a sales tax holiday and in other cases, it’s a tax-free weekend. No matter what the name is, you can expect to not pay state sales tax on any qualifying item during the tax-free shopping period.
What is a tax-free weekend?
A tax-free weekend is a period where shoppers do not pay the state’s regular sales tax on certain items. Which items are exempt vary from state to state, so it’s important to check the rules for the stores in your area.
Many retailers run big sales during tax-free weekends to entice shoppers and increase their sales volume. Savvy shoppers can score great deals on items on their shopping list by taking advantage of the discounts and tax savings (of course, it has to be an eligible item).
The length of time for the discounts can vary with two days on the low end for Iowa shoppers to seven days for the residents of Maryland. On average, tax-free weekends are three days long for most states that take part.
Which states have tax-free sales holidays?
There are 16 states that offer tax-free sales holidays. Each state has its own set of rules for what is included under the tax-free umbrella. The states with tax-free holidays are:
Each state has its own set of rules for the specific items exempt from tax and the cost limit per item. For example, Florida has a $60 limit per clothing item while Iowa puts that limit at $100.
Some items you can buy during a tax-free weekend include clothing, footwear, school supplies, books, and computers. Rules vary from state to state, so check with your local state on what’s exempt and what isn’t.
And, of course, the sales tax rate varies by state so the value of a sales tax holiday exemption varies from state to state. The good news is that every retailer in those states has to play along during the exemption period.
How to plan your shopping list for a tax-free weekend
Getting ready to shop on a tax-free weekend requires organization. First, you need to find out what items are included under the tax-free umbrella in the state where you plan to shop.
You will also need to figure out the maximum number per item you can spend tax-free. Keep in mind that luxury clothing and footwear are typically not tax-free, even if the price falls below the threshold limit.
Next, make a list of items you need to buy for each member of the family. Organize each list by family member and include sizes and any preferences. This will make it easier to search for sales on items for everyone. Don’t forget to include how much you plan to spend to ensure you stay within your monthly budget.
Grab the sales circulars for the stores in your area (digitally or whatever’s shown up in your mailbox) so you can get a sense of the sales on tax-free weekend. Over the years, it’s become more and more of a “shopping event,” so retailers have boosted their sales to get a piece of the action. Keep an eye out for special discounts and coupons for shopping during sales tax holidays.
Don’t forget to check for deals at online-only retailers where you can score big discounts in addition to a break on sales tax. Look for free shipping and don’t forget to go through a cash-back portal to maximize your savings.
Best things to buy during a tax-free weekend
Tax-free weekend sales usually correspond with the beginning of the school year. This means you can take advantage of back-to-school sales and pay no sales tax, which is a double win.
Depending on the state where you shop, not all these will apply to you. If you can get a tax break and a sale, here are some of the best things to buy during tax-free weekend:
1. School supplies
Back-to-school sales are the best time to buy supplies such as notebooks, pens, pencils, and glue. Even if you don’t have kids heading to school in the fall, you can stock up on rock-bottom prices on supplies for your home office.
Look for discounts, compare prices, stack sales with coupons, and enjoy the tax break on your purchase. Check with your state on the rules for school supply tax breaks and be mindful of any cost thresholds to avoid surprises at checkout.
If your state offers a tax break on clothes so parents can outfit kids for school, this is an excellent time to take advantage of the discount. You can scoop up fantastic deals on clothes for kids and adults since retailers run back-to-school sales.
This can be a great time to pick up warmer weather clothing such as tank tops, T-shirts, and skirts. As the weather gets warmer, you can layer them under heavier clothing such as sweaters and jackets.
If you want to plan ahead, consider buying a size bigger for your kids to get deals on spring and summer apparel for the following year. Many retailers also start clearing out summer styles to make room for fall looks, which means even more savings.
Combine sales, coupons, and other discounts and pay no tax on your purchase for even greater savings. Keep in mind that luxury items are not included in the tax-free umbrella. Check with your state for limits on clothing purchases.
Just like with clothes, tax-free weekend is a great time to stock up on shoes. From sandals to tennis shoes, you can get a variety of shoes for the entire family. Look for sales, discounts, and coupons and be mindful of price limits.
If you have growing kids, look for sales on shoes one size bigger and stock up for next year. This way you’re not scrambling and paying full price when you find out their shoes are suddenly pinching their toes.
4. Computers and tablets
If you live in a state that offers a tax exemption on computers and tablets, you can save big. Since these items can be pricey, getting a tax break will save you significant cash.
The states that offer a tax break on computers are Alabama, Florida, Massachusetts, Missouri, New Mexico, South Carolina, and Tennessee. Always check with your local state’s office for price limits and exclusions.
For example, if you plan to buy a laptop, you can stack sales with no sales tax to compound your savings. Let’s say you want to buy a laptop that retails for $900 and you live in Tennessee. With no discounts, while paying sales tax, the purchase will cost you $963. During the state’s tax-free weekend, you score the same laptop on sale for 20 percent off and pay no sales tax, saving you $243.
Items that have the biggest break on a tax-free weekend
The more expensive the item, the bigger the tax break. Tax rates vary from state to state so how much you save will depend on the tax rate at your local store. Since big-ticket items like computers cost several hundred dollars, you will save the most tax on those purchases.
With back-to-school sales, you can save big on supplies, clothes, and shoes to get your child ready for school. Avoid buying things not on your list since impulse spending will negate any savings on the purchase.
If your state takes part in the tax-free weekend holiday, it can be a great time to buy certain items for back to school such as clothes, shoes, and computers. Not all states participate, so make sure you check the rules for your location.
How much you save depends on the deals you score and the tax rate in your state. However, this can be a great time to stock up on school supplies and clothes, especially bigger sizes for growing kiddos.
Retailers run a number of discounts and sales to entice shoppers so you can save on things you were already planning to buy. Avoid impulse purchases as they can cost you more in the long run.
–By Veneta Lusk
Have you shopped on a tax-free weekend in your state before? What was your experience? Share in the comments.