With inflation, a recession, and school starting in just a few weeks, Texas Comptroller Glenn Hegar has announced that the Texas sales tax holiday will occur August 5-7.
Clothing, footwear, school supplies, and backpacks less than $100 will be exempt from the state sales tax, which is 6.25 percent, in addition to local sales taxes.
Sales tax holidays are a short period of time during which no collection of state sales taxes occurs for particular types of goods, usually school supplies and clothing.
Now, with inflation at the highest it’s been in 40 years, the comptroller’s office estimates that “shoppers will save $112 million in state and local sales tax during this sales tax holiday.”
The idea of sales tax holidays dates back to 1980 when Ohio and Michigan enacted tax holidays that suspended their sales taxes for automobile purchases in an attempt to boost sales during the recession.
However, the modern tax holiday trend was sparked by New York when the state began offering a tax holiday for clothing in 1997. New York officials wanted to keep citizens from traveling to neighboring states—particularly New Jersey—to buy goods at lower tax rates. Consumers saved $20 million during that period.
Since then, many other states have adopted the sales tax holiday, which is usually in August as parents do back-to-school shopping. This year, 15 states—including Florida and Alabama—already had or will have sales tax holidays. Texas has continued the practice of an annual sales tax holiday since 1999.
Tax-free items—which include most clothing, footwear, school supplies, and backpacks—sold for less than $100 (find a full list here), can be purchased from traditional brick-and-mortar stores or online retailers.