The annual state holiday is this weekend and stores are going to be busy! Be prepared and plan ahead to save yourself a headache. Below is some great information regarding what is eligible for the program. For more information, please visit the Texas Comptroller website.
Sales Tax Holiday
August 19 - 21, 2011
Texas shoppers get a break from state and local sales taxes on August 19, 20 and 21 - the state's annual tax holiday. Lay-away plans can be used again this year to take advantage of the sales tax holiday.
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 81st Texas Legislature passed HB 1801 (2009) expanding the list of items qualifying for exemption from Texas state and local sales and use taxes during the annual sales tax holiday in August. 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.
The following is an all-inclusive list of qualifying school supplies (if priced less than $100):
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.
List of Clothing, Footwear and Backpacks, and Their Exemption Status
For information on how to report tax on these sales, please visit Reporting Sales Tax on Tax-Free Items.