Last week we told you about several states having 'Back to School' Sales Tax Holidays that were taking place early in August. This week we want to update you on several other Sales Tax Holidays that are scheduled for later this month. One State, Mississippi, is actually having a 2nd sales tax holiday; earlier they had their back-to-school holiday, but later this month they will hold their annual 'Second Amendment' sales tax holiday.
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But before I give you these state sales tax holiday details I need to remind you that Insightful Accountant and Avalara, the Sales Tax People, have teamed-up again this year to bring you Sales Tax Tuesday 2018 which will feature sales tax news, including special information like sales tax holidays, covering every state jurisdiction with sales and use taxes in the United States.
Much of the time we are traveling around the country taking in the sights, sounds, thing-to-do, and great food and shopping experiences while we explore the sales taxes due, or not due in many cases. But every once and awhile we have to pause to bring you need to know special information like tax exemptions, state-wide holidays, or legislative decisions impacting sales taxability.
So let's take a look at four upcoming sales tax holidays.
August 10 - 12, 2018:
Texas sales tax holiday
- The exemption applies to clothing, footwear and other items priced less than $100
- It also covers specified school supplies and school backpacks priced less than $100 per item
- Take note that additional charges including delivery, shipping, handling and transportation costs are part of any item’s sale price and may result in an item otherwise below the $100 limitation actually being taxed for the total which maybe more than $100 when these charges are applied.
- Applies to state and local sales tax
August 12 - 18, 2018:
Maryland tax-free week
- Maryland offers a sales-tax free week each year starting the 2nd Sunday of August and running to the following Saturday.
- The exemption covers apparel and footwear priced at $100 or less
- It also covers backpacks or book-bags, the first $40 is tax free
- A list of taxable and exempt items can be found here
- Applies to state sales tax — Maryland has no local tax
August 19 - 25, 2018:
Connecticut tax-free week
- Connecticut also offers a week-long sales/use tax holiday. Theirs starts on the 3rd Sunday each August and running through the following Saturday
- The exemption applies to clothing and footwear priced under $100
- Details regarding exempt and taxable Items maybe found here
- Applies to state sales tax only — Connecticut has no local tax
August 31 - September 2, 2018:
Mississippi Second Amendment sales tax holiday
- This sales-tax holiday is in addition to the one Insightful Accountant told you about in July which covered clothing, footwear and accessories.
- This sales-tax holiday if for qualifying ammunition, firearms, and hunting supplies (no price restriction)
- A list of eligible and non-eligible Items maybe found here
- Applies to state and local sales tax
I would venture to guess there will be more than one 'manual sales tax' exemption determination made in every one of these states over the sales tax holiday. Despite lists of exempt and non-exempt items there will be misinterpretations made by retailers who are doing sales tax the old fashioned 'manual way'.
Many retailers believe they are compliant with the various rules and regulations governing sales taxes, including exempting the proper items in the proper way for the tax holidays, but the truth is that retailers frequently make mistakes when trying to do things based upon how some employee coded the items in their point-of-sale or accounting software. All too often that leads to an improper failure to collect tax that was due and that can result in fines, penalties and interest payable to the taxing authority.
Automation via Avalara allows businesses to rely on the 'experts' when it comes to sales tax compliance, you will not only be assured that you are administering all your sales and use taxes, including tax-exempt holidays, properly. Even better you won't be sacrificing time or productivity to be fully compliant with every sales tax change that impacts your business.