(RIVERWOODS, ILL., July 20, 2006) – Sales tax holidays are growing in popularity this year, according to CCH, a Wolters Kluwer business and a leading provider of tax information, software and services (CCHGroup.com). At least thirteen states and the District of Columbia will waive their sales and use taxes for a limited time, usually on back-to-school items such as clothing, footwear, school supplies and computers. Local sales taxes may continue to be imposed in some places, however.
“There’s not a lot of evidence that tax holidays increase sales, but they’re popular with retail merchants and, needless to say, families with back-to-school expenses,” said CCH State Tax Analyst Dan Schibley, JD .
Four new states are offering holidays this year: Alabama, Maryland, Tennessee and Virginia. New York, which held holidays in past years, now has a year-round exemption for clothing, footwear and items used to make or repair exempt clothing costing less than $110. In Massachusetts, a holiday has been proposed but not yet enacted.
Here is a list of the states offering sales tax holidays in 2006, with the dates of the holiday and the types of items covered:
Alabama: From August 4-6, 2006, 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 20-26, 2006. 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 5-13, 2006.
Florida: Books, clothing, footwear and certain accessories with a sales price of $50 or less per item, and school supplies with a sales price of $10 or less per item, are exempt from Florida sales and use tax from July 22-30, 2006. The exemption does not apply to sales within a theme park, entertainment complex, public lodging establishment or airport.
Georgia: From August 3-6, 2006, 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); computers, computer-related accessories and energy-efficient products for noncommercial use (for a single purchase of $1,500 or less).
Iowa: The state’s sales tax holiday on select clothing and footwear runs August 4-5, 2006. 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.
Maryland: From August 23-27, 2006, clothing and footwear (excluding accessories) costing $100 or less are exempt.
Massachusetts: Proposals for a holiday in 2006 are still pending in the Massachusetts legislature, but these have encountered opposition and their fate is uncertain. In 2004 and 2005, Massachusetts held a sales tax holiday the second weekend in August during which retail sales of practically any item costing $2,500 or less were exempt.
Missouri: From August 4-6, 2006, 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. If less than 2 percent of a retailer’s merchandise qualifies for the tax holiday, the retailer must offer a tax refund in lieu of the tax holiday.
New Mexico: Customers may buy the following items free of tax from August 4-6, 2006: 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 4-6, 2006. Exempt items are clothing and school supplies with a sales price of $100 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.
South Carolina: During the period August 4-6, 2006, 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 and furniture, are not exempt during the holiday.
Tennessee: Clothing and school supplies costing $100 or less and computers costing $1,500 or less are exempt from August 4-6, 2006.
Texas: From August 4-6, 2006, sales of most clothing and footwear 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 4-6, 2006.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax and accounting law information, software and services. It has served tax, accounting and business professionals and their clients since 1913. Among its market-leading products are The ProSystem fx® Office, CCH® Tax Research NetWork™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading multinational publisher and information services company. The Company’s core markets are health, corporate services, financial services, tax, accounting, legal, regulation, and education. Wolters Kluwer has annual revenues (2005) of €3.4 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. For more information, see www.wolterskluwer.com.