Holidays

Sales tax holidays are coming

Tennessee’s is this weekend beginning at 12:01 a.m. on Friday and ending at 11:59 p.m. the following Sunday.

Virginia’s starts at 12:01 a.m. on Aug. 4 and ends the following Sunday at 11:59 p.m.

According to the Tax Foundation, 16 states will hold a sales tax holiday in 2017, down from a peak of 19 states in 2010 and down from 17 states last year.

The Tax Foundation believes sales tax holidays do not promote economic growth or significantly increase consumer purchases, but instead consumers simply shift the timing of purchases.

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“Some retailers raise prices during the holiday, reducing consumer savings,” the organization said in a news release. “Sales tax holidays create complexities for tax code compliance, efficient labor allocation, and inventory management. However, free advertising for what is effectively a paltry 4 to 7 percent discount leads many larger businesses to lobby for the holidays.

“Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief. If a state must offer a ‘holiday’ from its tax system, it is an implicit recognition that the state’s tax system is uncompetitive.”

Here is how Tennessee’s sales tax holiday works:

Who can buy tax-exempt clothing?

Anyone (not just students) can buy clothing that qualifies.

What’s tax-exempt?

General apparel that costs $100 or less per item (shirts, pants, jackets, socks, shoes, dresses, etc.), and items that are normally sold together, such as shoes, cannot be split up to stay beneath the $100 threshold.

What’s still taxable?

Apparel that costs more than $100; items such as jewelry, handbags, or sports and recreational equipment; and items purchased for business or trade use.

Who can buy tax-exempt computers?

Anyone (not just students) can buy computers that qualify.

What’s tax-exempt?

Computers with a purchase price of $1,500 or less. This includes laptops as well as tablets (iPads, etc.) and computers for personal (not business) use.

What’s still taxable?

Computer parts, like keyboards and monitors, when not sold with a CPU; storage media, like flash drives and compact discs; individually purchased software; video game consoles; computer printers and supplies; electronic readers (Kindles, Nooks, etc.) and personal digital assistants; and cell phones, including smart phones.

More items are listed at www.tntaxholiday.com.

How does Virginia’s sales tax holiday work?

During the sales tax holiday, you can buy qualifying school supplies, clothing, footwear, hurricane and emergency preparedness items, and Energy Star™ and WaterSense™ products without paying sales tax.

What items are eligible?

School supplies, clothing, and footwear; qualified school supplies ($20 or less per item); qualified clothing and footwear ($100 or less per item); hurricane and emergency preparedness products; portable generators ($1,000 or less per item); gas-powered chainsaws ($350 or less per item); chainsaw accessories ($60 or less per item); Energy Star™ and WaterSense™ products; and Qualifying Energy Star™ or WaterSense™ products purchased for noncommercial home or personal use ($2,500 or less per item).

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