School Shopping

ALL ABOUT TEXAS’ TAX FREE WEEKEND IN AUGUST

BY PETE ALFANO

Two words we rarely hear in the same sentence are tax and free. But that is precisely what Texas residents will experience on the third Sales Tax Holiday weekend of 2023, between August 11 to 13, coinciding with the beginning of the new school year. That means most clothing and school supplies of less than $100 are exempt from sales tax. And depending on how big a family you have and their needs, the savings can be significant.

A survey conducted by Deloitte, a worldwide auditing, consulting, and tax services company, found that the average spent per child for clothing and school supplies in the U.S. was $661 in 2022. The state-wide sales tax in Texas is 6.25%, but many local municipalities tack on another two points, making the sales tax 8.25%. Thus, the tax-free weekend savings are $54.50 for every $661.00. Multiply that by a second and third child, and the savings isn’t chump change for many families.

Shoppers, however, are advised to visit Comptroller.Texas.Gov and search for sales tax weekend 2023 for a detailed list of tax-exempt items and those that aren’t. This will help avoid confusion and delays in the checkout line. For example, most shoes, including sneakers and tennis shoes, are exempt, but cleated and spiked sports shoes are not. Sleepwear, dresses, jeans, sweaters, sweatshirts, sweat suits, leggings, and even diapers are exempt, but not sports equipment, jewelry, handbags, and purses. Backpacks under $100 are exempt but only for elementary and secondary school children.

Most of the basic school supplies are exempt from sales tax. A short list includes binders, chalk, calculators, erasers, folders, crayons, markers, lunch boxes, legal pads, scissors, notebooks, pencils, pens, glue, and paste. In addition to individual items costing $100 or more, computers, laptops, and other electronics are not exempt.

Shoppers, however, should have their eyes wide open before venturing out into the masses on a sales tax holiday weekend. Some retailers may increase prices to take advantage of the influx of shoppers. Items that may have been on sale earlier in the summer may now be marked up to their pre-sale price. So, check prices the week before or even the week after, a tax-free weekend, and you may get better deals. And don’t be lulled into buying taxable items you don’t need.

While states like Texas gain good publicity on tax-free weekends, they also lose millions in tax revenue. What’s more, tax-free weekends are open to non-residents of Texas. Think Oklahoma and Louisiana. This may help retailers but doesn’t add to the state’s tax coffers. A study by Federal Reserve researchers in 2017 found that sales tax holidays don’t stimulate the economy but simply shift the time when consumers make their purchases.

But here is some good news for people who want to avoid crowded malls and shopping centers and make their purchases online. Amazon, the largest online retailer, says it honors a state’s sales tax holiday and will not charge the customary tax for exempt items. Of course, the biggest problem with purchasing online is buying apparel that may not fit and must be returned. If you buy it again, it most likely won’t be during the sales tax holiday, which means life can get more complicated.