Texas shoppers get a break from state and local sales taxes on the state's annual tax holiday August 17-19th.
The law exempts most clothing, footwear, school supplies and backpacks priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.
Lay-away plans can be used again this year to take advantage of the sales tax holiday.
Retailers will not be required to collect state and local sales or use tax on most footwear and clothing that are sold for less than $100 during the holiday. The exemption applies to each eligible item that sells for less than $100, regardless of how many items are sold on the same invoice to a customer. For example, if a customer purchases two shirts for $80 each, then both items qualify for the exemption, even though the customer's total purchase price ($160) exceeds $99.99.
The exemption does not apply to the first $99.99 of an otherwise eligible item that sells for more than $99.99. For example, if a customer purchases a pair of pants that costs $110, then sales tax is due on the entire $110.
The exemption also does not apply to sales of special clothing or footwear that the manufacturer primarily designed for athletic activity or protective use and that is not normally worn except when used for the athletic activity or protective use for which the manufacturer designed the article. For example, golf cleats and football pads are primarily designed for athletic activity or protective use and are not normally worn except for those purposes; they do not qualify for the exemption. Tennis shoes, jogging suits and swimsuits, however, are commonly worn for purposes other than athletic activity and thus qualify for the exemption.
Additionally, tax is due on sales of accessories, including;
- and similar items.
The sales tax holiday exemption does not extend to rental of clothing or footwear; nor does it apply to alteration or cleaning services performed on clothes and shoes. These items continue to be subject to state and local sales or use tax.
Backpacks under $100 and used by elementary and secondary students are exempt. A backpack is a pack with straps one wears on the back. The exemption during the sales tax holiday includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and messenger bags.
The exemption does not include items that are reasonably defined as;
- athletic/duffle/gym bags
- computer bags
- or framed backpacks.
Ten or fewer backpacks can be purchased tax-free at one time without providing an exemption certificate to the seller.
Texas families also get a sales tax break on most school supplies priced at less than $100 purchased for use by a student in an elementary or secondary school.
The following is an all-inclusive list of qualifying school supplies (if priced less than $100):
- Book bags
- Cellophane tape
- Blackboard chalk
- Composition books
- and manila
- Glue, paste and paste sticks
- Index cards
- Index card boxes
- Legal pads
- Lunch boxes
- Markers (including dry erase markers)
- loose leaf ruled notebook paper
- copy paper
- graph paper
- tracing paper
- manila paper
- colored paper
- poster board
- and construction paper
- loose leaf ruled notebook paper
- Pencil boxes and other school supply boxes
- Pencil sharpeners
- Writing tablets
No exemption certificate is required - with one exception. If the purchaser is buying the supplies under a business account, the retailer must obtain an exemption certificate from the purchaser certifying that the items are purchased for use by an elementary or secondary school student.
"Under a business account" means;
- the purchaser is using a business credit card or business check rather than a personal credit card or personal check
- being billed under a business account maintained at the retailer
- or is using a business membership at a retailer that is membership based.
List of Clothing, Footwear and Backpacks, and Their Exemption Status During the Sales Tax Holiday:
- Baby clothes
- Backpacks for use by elementary and secondary students
- Belts with attached buckles
- Boots - cowboy, hiking
- Coats and wraps
- Diapers - adult and baby
- Gloves (generally)
- Gym suits and uniforms
- Hooded shirts and hooded sweatshirts
- Jerseys - baseball and football
- Jogging apparel
- Neckwear and ties
- Pants and trousers
- Raincoats and ponchos
- Socks (including athletic)
- Suits, slacks, and jackets
- Sweat suits
- Work clothes and uniforms