Sales Tax Holiday Strategies to Use This Year
Sales taxes are a nuisance many Americans have to deal with every day. Every time you make a purchase, you have to factor in a little extra money on top of the purchase price if you live in a state with state and local sales taxes. These taxes can really start to add up, especially on expensive items such as computers or home appliances.
Fortunately, many state governments offer a sales tax holiday during the year — sometimes more than one — to help consumers and boost local sales. Taking advantage of these holidays can make a big difference in your budget.
What Are These Holidays?
A sales tax holiday is a period of time when a state doesn’t charge sales tax. These holidays typically occur over a weekend, lasting two to three days, to make it easier for shoppers to get to the stores. Some states may offer longer holidays for particular items. When a state throws a sales tax holiday, it doesn’t stop charging sales taxes on everything. Instead, specific categories of goods are eligible for the holiday. States also usually set a maximum purchase limit for eligibility.
For example, Oklahoma’s holiday this year will last from August 7 to August 9. Shoppers can avoid all sales taxes on purchases of clothing and footwear, provided each item has a sales price under $100. The clothing and footwear must also not be specially designed for athletic or protective use, and accessories are not eligible. In other words, a shopper can buy three shirts worth $80 and avoid sales taxes, but a shirt worth $120 wouldn’t be eligible for the holiday, nor would football cleats worth $50.
What States Have Sales Tax Holidays?
Sixteen states are holding at least one sales tax holiday in 2015, but you don’t have to be a resident of one of those states to benefit. Driving across the country to save on sales taxes for a pair of shoes doesn’t make sense, of course, but taking a trip to a nearby state to purchase a large appliance might be well worth the savings.
Maryland, for example, does not charge sales tax on Energy Star products and solar water heaters during its February holiday each year, and the state sets no price limit for these items. It’s easy to spend several thousand dollars on appliances, so this particular tax holiday could add up to some serious savings. Several states have sales tax holidays for computers, another big ticket item. South Carolina and Missouri have the highest price limits for this tax exemption: up to $3,500 in Missouri, and no limit in South Carolina.
What Strategies Do I Need to Keep in Mind?
It helps to start preparing for sales tax holidays as soon as possible. Most holidays happen during the summer and the fall. Here’s a complete list of all the 2015 sales tax holidays to help you plan your spending accordingly.
Be sure to double check the rules for a holiday before you shop—you don’t want to get your hopes up for a big purchase only to find out it’s not eligible. Finally, don’t only focus solely on the sales tax savings. While avoiding sales taxes is a nice break, it’s not the only way to save money. If you see a better deal from a sale, you may be able to save more by buying now rather than waiting for the sales tax holiday.
Don’t pay more than you have to this year in sales taxes. By making the most of these events, you’ll be able to buy big items at sizable discounts.