Hegar announces sales tax holiday

Texas Comptroller Glenn Hegar this week announced the annual sales tax holiday held before schools start again in August, where shoppers can save on clothing and school supplies. The event will be held Aug. 6-8 across the state on qualified items.

The sales tax holiday will begin Friday, Aug. 6, and will run through midnight Sunday, Aug. 8. The holiday weekend has been an event in the state since 1999, with the Comptroller’s office estimating $107.3 million in state and local sales tax savings during this upcoming holiday weekend.

During the sales tax holiday qualifying items can be purchased tax-free online, by phone, mail, custom ordered or through any other means, including in-store purchases made in state stores. The item must be delivered and paid for by the customer during the holiday period or must be ordered and paid for with the seller accepting the order during the holiday period for immediate shipment. This includes if the delivery is made after the holiday ends.

“For many families with children who are going back to their school campuses for the first time since the pandemic began, the sales tax holiday is the perfect opportunity to save money on school supplies and other tax-free items,” Hegar said in a press release. “As a father with three school-aged children myself, I know how these expenses can add up.”

Clothing, footwear, school supplies and backpacks that are sold less than $100 are tax free during the holiday weekend. The exemption applies to each eligible item sold for less than $100, with no limit on the number of qualifying items for purchase. As shoppers head out to stores to purchase items, the Comptroller asks them to follow social distancing guidelines.

“The Comptroller’s office urges all taxpayers buying certain qualifying items at their local retailers to practice appropriate social distancing as described in the Center for Disease Control and Prevention guidelines during the sales tax holiday,” the Comptroller’s office states online.

Delivery, shipping, handling and transportation charges by the seller are part of the item’s sales price so shoppers need to look closely with items which need to be less than $100 to qualify for the exemption. The item’s total sales price will determine if it can be purchased tax free.

“If a delivery charge is billed per item, and an invoice has both exempt and taxable items, only the qualifying exempt item’s delivery charge is exempt,” the Comptroller’s office states on their website. “If the delivery charge is a flat rate per package, and the amount charged is the same regardless of how many items are included in the package, the total charge can be attributed to any one of the items in the package.”

Qualified Items
School supplies under $100 which qualify for the holiday exemption include binders, blackboard chalk, bookbags, calculators, cellophane tape, compositions books, crayons, erasers, folders, glue, highlighters, lunch boxes, markers, notebooks, paper (loose leaf ruled notebook paper, copy paper, graph paper, manilla paper, colored paper, poster board, construction paper), pencils, pens, protractors, rulers, scissors. A full list of items exempt can be found at comptroller.texas.gov/taxes/publications/98-490/school-supplies.php.

For kits of school supplies with items that are exempt and taxable, the taxability depends on the value of the taxable exempt items within. There are no limitations on the number of school supplies in a kit, but if the value of exempt items exceeds the taxable ones, the kit is exempt.

Examples of qualifying clothing and footwear are belts, boots (general purpose, cowboy, hiking), bras, coats and wraps, dresses, football jerseys, graduation caps and gowns, gym suits and uniforms, hats, hooded shirts and hooded sweatshirts, jeans, jackets, pants, raincoats, scarves, shirts, dress shoes, tennis shoes, socks, underwear, uniforms (school, work, nurse, waitress, military, postal, police, fire), work clothes and more. A full list of items can be found at comptroller.texas.gov/taxes/publications/98-490/clothing-footwear.php.

Face masks are defined as clothing and are exempt from sales tax during the holiday weekend. If a cloth of disposable fabric face mask is sold with a filter, the mask is exempt during the holiday, but replacement filters are ineligible and taxable.

Unqualified Items
Items that do not qualify for the exemption include items sold for $100 or more, clothing subscription boxes, specially-designed athletic activity or protective-use clothing or footwear, clothing or footwear rentals along with alterations and cleaning services. Items used to repair clothing such as fabric, thread, yarn, buttons, snaps, hooks and zippers do not qualify.

Jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets, watches and other accessories are additionally unqualified. Also unqualified are computers, software, textbooks, specific baggage items (framed backpacks, luggage, briefcases, athletic bags, duffle bags, gym bags, computer bags, purses) and school supplies sold for less than $100.