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Some Consumers Get a Break With State Tax Holidays, CCH Says

2008-07-17 14:05:00

                   August Holidays Just Around the Corner

    RIVERWOODS, Ill., July 17 /EMWNews/ -- Back-to-school shopping will

be tax-free for a few days this August in thirteen states and the District

of Columbia, according to CCH, a Wolters Kluwer business and a leading

provider of tax, accounting and audit information, software and services

( During these "tax holidays" back-to-school

items such as clothing, footwear, school supplies, and computers may be

purchased free of state sales tax. Local sales taxes may continue to be

imposed in some places, however.

    Changes for 2008

    Two big states are missing from the usual group of states offering tax

holidays this August. Florida and Massachusetts are not participating in

2008 (although last-minute action by the Massachusetts Legislature is not

out of the question).

    "Tight budgets in both states are blamed for their legislatures'

reluctance to forego the sales tax revenue this year," said Daniel

Schibley, JD, CCH senior state tax analyst.

    Vermont, on the other hand, moved ahead of the pack with a broad-based

holiday in July, the state's first entry in the holiday sweepstakes. The

Green Mountain State suspended sales tax for two days, July 12-13, on sales

to individuals for personal use of most items priced $2,000 or less.

    Maryland, meanwhile, which suspended its annual August back-to-school

holiday last year, plans to return with a week-long holiday, but not until

August 2010.

    Holidays for Energy Efficiency Proliferate

    The tax holiday phenomenon continues to expand beyond the month of

August and sales of back-to-school supplies. The most popular new category,

reflecting concerns about the high cost of energy and the state of the

environment, is for holidays for energy-efficient products. Vermont

extended its July holiday period an extra five days for sales of

energy-efficient appliances. West Virginia will have a new sales tax

holiday for energy-efficient products in September, followed by Georgia and

Virginia in October, which have expanded existing holidays for these

products to include water-efficient products. North Carolina will hold a

new holiday in November to encourage energy-conscious purchases.

    Missouri will join the group in April 2009 with a new holiday for

energy-efficient products. Texas plans to hold its second such holiday next

Memorial Day weekend. The South Carolina Legislature overrode the

Governor's veto to create a new holiday for energy-efficient products

lasting the entire month of October 2009. Looking far ahead, Maryland plans

to join the club with a holiday in February 2011. Connecticut, however,

which had an energy-efficiency holiday for four months in 2007, does not

have any further ones scheduled.

    Hurricanes and Guns

    Some states hold special-purpose holidays outside of the mainstream

themes of back-to-school and energy efficiency. Louisiana and Virginia

continued to hold tax holidays for hurricane-preparedness supplies in the

spring of this year. Florida, however, which has held a similar holiday in

the past, opted out in 2008.

    Unique in the nation, the South Carolina Legislature, overriding

another veto, enacted an annual holiday for sales of handguns, rifles and

shotguns during what it dubbed the "Second Amendment Weekend" -- the Friday

and Saturday following Thanksgiving.

    August 2008 Holidays

    Alabama: From August 1-3, 2008, the following are exempt: clothing

costing $100 or less per article; a single purchase costing $750 or less of

computers, software and school computer supplies; noncommercial purchases

of school supplies and instructional materials up to a sales price of $50

per item; and noncommercial purchases of books up to $30 each.

    Connecticut: Clothing and footwear sold for less than $300 are exempt

from sales and use tax from August 17-23, 2008. The holiday exemption

replaces the regular exemption for clothing and footwear costing less than

$50, which remains in effect for all other periods, and it does not apply

to athletic or protective clothing and footwear, jewelry, handbags,

luggage, umbrellas, wallets and watches.

    District of Columbia: Sales of school supplies, clothing, accessory

items and shoes for $100 or less are exempt from sales tax from August

2-10, 2008. Shoppers who miss out on the August holiday get a second bite

at the apple with a second holiday held every November for clothing,

footwear and accessories.

    Georgia: From July 31-August 3, 2008, Georgia sales and use tax does

not apply to certain school supplies (up to $20 per item); clothing and

footwear (priced at $100 or less per article); and computers and

computer-related accessories (for a single purchase of $1,500 or less).

    Iowa: The state's sales tax holiday on select clothing and footwear

runs August 1-2, 2008. During the holiday, no sales tax, including school

and local option sales taxes, will be collected on clothing or footwear

that have a selling price of less than $100 per item. Certain accessories

are excluded from the tax holiday.

    Louisiana: In a broad-based holiday that goes well beyond

back-to-school items, the first $2,500 of the price of most items of

tangible personal property purchased from August 1-2, 2008, will be exempt.

The holiday covers purchases by consumers for nonbusiness use, but does not

apply to transactions involving vehicles, meals, taxable services, or

leases or rentals of tangible personal property.

    Missouri: From August 1-3, 2008, retail sales of the following are

exempt from state sales tax: clothing and footwear (excluding certain

accessories) costing $100 or less, school supplies costing $50 or less,

computer software with a taxable value of $350 or less, and personal

computers and computer peripheral devices sold for $3,500 or less. The tax

holiday may not apply to a retailer if less than 2 percent of its

merchandise qualifies for the holiday; however, the retailer must offer a

tax refund if the customer requests one.

    New Mexico: Customers may buy the following items free of tax from

August 1-3, 2008: clothing or shoes sold for less than $100 (excluding

items primarily for athletic or protective use); computers (but not

handheld computers) sold for no more than $1,000, and any associated

monitor, speakers, printer or related items sold for no more than $500;

notebooks, paper, writing instruments, crayons, art supplies, paper clips,

staples, staplers, scissors and rulers priced under $15; and book bags,

backpacks, handheld calculators, maps and globes priced under $100.

However, retailers are not required to participate.

    North Carolina: The sales and use tax holiday runs from August 1-3,

2008. Exempt items are clothing and school supplies with a sales price of

$100 or less; school instructional materials of $300 or less; sports and

recreation equipment with a sales price of $50 or less; computers with a

sales price of $3,500 or less; and computer supplies costing $250 or less.

Clothing accessories, protective equipment, furniture and rentals are not

exempt during the holiday.

    Oklahoma: Sales of clothing and footwear costing less than $100 are

exempt from August 1-3, 2008.

    South Carolina: During the period August 1-3, 2008, clothing, clothing

accessories, footwear, school supplies, computers, printers, printer

supplies, computer software, and linens for the bed and bath are exempt

from state and local sales tax. Certain items, including, but not limited

to, jewelry, cosmetics, furniture and items for use in a business are not

exempt during the holiday.

    Tennessee: Clothing and school supplies, including art supplies,

costing $100 or less, and computers, other than those for use in a trade or

business, costing $1,500 or less, are exempt from August 1-3, 2008.

    Texas: From August 15-17, 2008, sales of most clothing, footwear, and

school backpacks priced at less than $100 are exempt from state and local

sales taxes. Clothing and footwear used primarily for athletic activities

or for protective wear are ineligible for the exemption. Accessories and

rentals of clothing also are excluded from the holiday.

    Virginia: Sales of clothing and footwear costing $100 or less and

school supplies costing $20 or less are exempt from August 1-3, 2008.

    About Daniel Schibley

    Daniel Schibley is an attorney and state tax analyst who specializes in

tracking, analyzing and reporting on new developments and trends in state

tax issues. A former practicing attorney and assistant professor of law,

Schibley is a leading authority on Streamlined Sales Tax Project


    About CCH, a Wolters Kluwer business

    CCH, a Wolters Kluwer business ( is a leading

provider of tax, accounting and audit information, software and services.

It has served tax, accounting and business professionals since 1913. Among

its market-leading products are The ProSystem fx(R) Office, CorpSystem(R),

CCH(R) Tax Research NetWork(TM), Accounting Research Manager(R) and the

U.S. Master Tax Guide(R). CCH is based in Riverwoods, Ill.

    Wolters Kluwer is a leading global information services and publishing

company. The company provides products and services globally for

professionals in the health, tax, accounting, corporate, financial

services, legal and regulatory sectors. Wolters Kluwer has annual revenues

(2007) of euro 3.4 billion ($4.8 billion), maintains operations in over 33

countries across Europe, North America and Asia Pacific and employs

approximately 19,544 people worldwide. Wolters Kluwer is headquartered in

Amsterdam, the Netherlands. For more information, visit

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