Sales Tax Holiday To Include More Back-To-School Supplies This Year
With schools about to open throughout the Houston area, parents shopping for back-to-school clothing and supplies will once again be able to take advantage of Texas’ annual sales tax holiday.
Shoppers will get a break from state and local sales taxes for most school-related items on Aug. 21, 22 and 23.
Additionally, lay-away plans can be used tax-free for allowable items again this year.
According to the Texas Comptroller of Public Accounts, 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. The exemption during the sales tax holiday includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, as well as 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.
School Supplies – New for 2009
The 81st Texas Legislature recently passed HB 1801 expanding the list of items qualifying for exemption from sales tax during the sales tax holiday.
Effective this year, in addition to clothes, footwear and some backpacks, parents 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
- Folders; expandable, pocket, plastic, and manila
- Glue, paste and paste sticks
- Index cards
- Index card boxes
- Legal pads
- Lunch boxes
- Paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction 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.
Clothing, Footwear and Backpacks
The following items of clothing, footwear and backpacks are classified as tax-free:
- Baby clothes
- 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
- 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
- Shoes – sandals, slippers, sneakers, tennis, walking
- Socks (including athletic)
- Suits, slacks, and jackets
- Sweat suits
- Work clothes and uniforms
Items Not Exempt During Sales Tax Holiday
The following items are not classified as tax-free and will be subject to the usual state and local sales and use taxes:
- 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
- Football pants
- Golf gloves
- Handbags and purses
- Hard hats
- Helmets – bike, baseball, football, hockey, motorcycle, sports
- Ice skates
- Laundering services
- 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
The Comptroller’s Office also cautioned retailers who sell items that do not quality for the exemption not to advertise they will pay the customers’ tax. Retailers are also prohibited from advertising that they will not collect sales tax on items that do not qualify for the sales tax holiday.
Retailers may, however, advertise that tax is included in the sales price of taxable items.