Sales-Tax Holiday Tips

Most shoppers sneer at a 10% discount, but it's that time of year for the one small sale people go wild for: state sales tax holidays. Kelli Grant, Senior Consumer Reporter for SmartMoney.com gives tips on the best ways to take advantage of the savings.

17 states are hosting sales tax holidays this year, and a dozen of them happen over the weekend of August 3-5. Saving are 4% to 7%, depending on the state. We have a guide on SmartMoney of when to go and what's covered, but you can also check on your state's tax web site to see what's going on.

A state tax holiday doesn't mean purchase will be entirely tax free. There may still be a county, city or jurisdiction sales tax in effect. That could still add 8% to your bill. Check with the tax commission to see what your town is doing before deciding which area mall to visit.

Tax holidays are more valuable this year because of early back-to-school sales. Shoppers are getting tax savings on top of some really steep discounts. But keep in mind that states usually don't count something as under the threshold for a tax-free purchase if it's a rebate or coupon driving down the price.

States most commonly exempt clothing, computers and school supplies, but those are broad lists. Check your state's details. North Carolina considers disposable baby diapers clothing, meaning it may be a good time to stock up. South Carolina adds in bed linens and wedding dresses, and in Arkansas, "clothing" also covers cosmetics.

Be careful of exemptions. Online purchases might not count if the merchant doesn't process the order within the holiday time frame, and states usually nix layaway and pre-ordered items, too. Many of the lists also exclude things like athletic clothing and accessories like handbags, too. If you're not sure, ask at checkout - and check your receipt.

For more information on sales tax holidays and other consumer tips click here.

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