Texas shoppers get a break from state and local sales taxes Aug. 21-23 the states annual tax holiday. Layaway plans can be used again this year to take advantage of the sales tax holiday.
New this year is the inclusion of school supplies as eligible purchases during the sales tax holiday.
The 81st Texas Legislature passed HB 1801, which expanded the list of items qualifying for exemption from state and local sales and use taxes during the annual sales tax holiday in August. Effective this year, in addition to clothes, footwear and some backpacks, 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.
As in previous years, the law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.
Backpacks under $100 and used by elementary and secondary students are also 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 luggage, briefcases, athletic/duffle/gym bags, computer bags, purses or framed backpacks. Ten or fewer backpacks can be purchased tax-free at one time without providing an exemption certificate to the seller.
The following is an all-inclusive list of qualifying school supplies (if priced less than $100):
2. Book bags
4. Cellophane tape
5. Blackboard chalk
7. Composition books
10. Folders; expandable, pocket, plastic and manila
11. Glue, paste and paste sticks
13. Index cards
14. Index card boxes
15. Legal pads
16. Lunch boxes
19. Paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board and construction paper
20. Pencil boxes and other school supply boxes
21. Pencil sharpeners
27. 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.
The following items are tax-exempt during the sales tax holiday:
Backpacks for use by elementary and secondary students
Belts with attached buckles
Boots cowboy, hiking
Caps/hats baseball, fishing, golf, knitted
Coats and wraps
Diapers adult and baby
Gym suits and uniforms
Hooded shirts and hooded sweatshirts
Jerseys baseball and football
Neckwear and ties
Pants and trousers
Raincoats and ponchos
Shoes sandals, slippers, sneakers, tennis, walking
Socks (including athletic)
Suits, slacks and jackets
Work clothes and uniforms
The following items are not tax-exempt:
Accessories (generally) barrettes, elastic ponytail holders, wallets, watches
Backpacks unless for use by elementary and secondary students
Baseball cleats and pants
Belt buckles (without belt)
Boots climbing, fishing, rubber work boots, ski, waders
Buttons and zippers
Cloth and lace, knitting yarns and other fabrics
Dry cleaning services
Handbags and purses
Helmets bike, baseball, football, hockey, motorcycle, sports
Leather goods except belts with buckles and wearing apparel
Pads football, hockey, soccer, elbow, knee, shoulder
Personal flotation devices
Rented clothing (including uniforms, formal wear and costumes)
Roller blades and skates
Safety clothing, glasses
Shoes bicycle (cleated), bowling, golf
For complete information on the sales tax holiday in Texas, visit the Texas Comptroller of Public Accounts Web site at www.window.state.tx.us.