In a bid to spur consumer spending, 17 states are offering sales tax holidays this summer and fall. But while a sales-tax holiday offers added incentive to hit the mall, be on the alert for fine print. Kelli Grant, Senior Consumer Reporter for SmartMoney.com shares tips on how to take advantage of your state's holiday.
Of the states that participated last year, only Georgia has cancelled its holiday so far. Florida brought its program back, and Illinois and Maryland are offering them for the first time. States know these holidays are popular with consumers and it's a great boost for shoppers and local businesses.
Stick to a budget when you go to shop during this time. States count on some tax revenue during the holidays, figuring the break will spur people to add a few excluded items to their shopping lists. But a 4% or 6% discount isn't significant enough to warrant impulse purchases or trading up for more expensive jeans or sneakers. Prepare and stick to your shopping list.
Most states leave it to individual towns and counties to decide if they will waive more than the state portion of the sales tax during the holiday. There might still be a county, city or special jurisdiction sales tax in effect. Check with the state tax commission to see what your area is doing and compare other local rates before deciding which area mall to visit.
Many states get very specific, so read up on what's included in the holiday. Florida, for example, excludes sales made in theme parks or entertainment complexes, while Texas nixes specific items including belt buckles, football pants and personal flotation devices.
Pair the state waiver with store sales and coupons when possible. Retailers are likely to offer plenty of sales that knock prices to below the states' caps. But not every promotion results in a tax-free purchase. Some states, including Iowa, don't count manufacturers coupons or rebates when assessing an item's value.
For a purchase to count, the sale must be processed by the end of the holiday. Online purchases are usually covered, but items that you pre-order or set aside on layaway are unlikely to be.
For more information on sales-tax holidays click here.
Kelli Grant & Erika Wortham
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