Sales Tax Holiday August 20 - 22, 2010
Texas shoppers get a break from state and local sales taxes on August 20, 21 and 22 - 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. School Supplies
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. Effective this year, 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):
* Binders * Book bags * Calculators * Cellophane tape * Blackboard chalk * Compasses * Composition books * Crayons * Erasers * Folders; expandable, pocket, plastic, and manila * Glue, paste and paste sticks * Highlighters * Index cards * Index card boxes * Legal pads
* Lunch boxes * Markers * Notebooks * 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 * Pencils * Pens * Protractors * Rulers * Scissors * 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. List of Clothing, Footwear and Backpacks, and Their Exemption Status 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 * Dresses * Gloves (generally) * Gym suits and uniforms * Hooded shirts and hooded sweatshirts * Hosiery * Jackets * Jeans * Jerseys - baseball and football * Jogging apparel * Neckwear and ties * Pajamas * Pants and trousers * Raincoats and ponchos * Robes * Shirts * Shoes - sandals, slippers, sneakers, tennis, walking * Socks (including athletic) * Shorts * Suits, slacks, and jackets * Sweatshirts * Sweat suits * Sweaters * Swimsuits * Underclothes * Work clothes and uniforms
* 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 * Handkerchiefs * Hard hats * Helmets - bike, baseball, football, hockey, motorcycle, sports * Ice skates * Jewelry * 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
A word of caution: If you sell items that do not qualify for the exemption, you may not advertise or promise that you will pay your customers' sales tax. Additionally, you are prohibited from advertising that you will not collect sales tax on items that do not qualify. You may advertise that tax is included in the sales price of the taxable items that you sell, however.
For information on how to report tax on these sales, please visit Reporting Sales Tax on Tax-Free Items or call us toll free at (800) 252-5555.