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Sales Tax Holiday Weekend Begins In 12 States For Back-To-School Shopping

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Consumers in 12 states, most of them in the southeastern U.S., will get a break from sales tax on many items this weekend thanks to a tax holiday. This week’s sales tax holiday is aimed at back-to-school spending of school supplies and clothing, giving families a savings of 5 percent to 10 percent off, depending on the state.

Tax holidays have been around since the 1990’s although they reached a peak in 2010 following the Great Recession. This year, almost 20 states have had at least one tax holiday.

The sales tax holiday began in Alabama, Florida, Missouri, Louisiana, Iowa, New Mexico, Ohio, Oklahoma, Tennessee, South Carolina, Virginia, and Texas on Friday, August 7 and runs through Sunday, August 9. Massachusetts and Maryland are set to have a tax holiday later in August.

J. Craig Shearman, the spokesman for the National Retail Federation, was quoted by USA Today as saying the tax holiday is “about putting clothes on children’s backs.”

This is literally about putting clothes on children’s backs. We estimate families will spend around $630 on back to school this year. If you take 5% off, that’s over $30, which could be a whole outfit, a school uniform, a backpack, a pair of shoes or a winter coat.

Ohio was the latest state to announce its first sales tax holiday for back-to-school shopping. Retail sales in the state are expected to climb almost 5 percent this month, hitting $78 million. USA Today reports that the estimated losses in sales tax revenue in the state will be offset by consumers spending more on taxable impulse buys when they go shopping.

Not all locations in states with a tax holiday will participate and county taxes may still be applicable. The items that will be tax-free this weekend vary by state. In Virginia, school supplies of up to $20 per item as well as footwear and clothing up to $100 per item will be tax-free. In Ohio, there will be no sales tax on clothing priced at $75 or less; school instructional materials priced under $20; and school supplies priced at $20 or less. Louisiana has the broadest tax holiday that applies to any “consumer purchase of tangible personal property” with some exclusions like services and meals.

According to NBC News, consumers can maximize savings by combining discounts, student savings, coupons, cash-back offers, and rebates by shopping both in-store and online. Studying the rules is a must, as there’s usually a price cap on each category.

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