Tax-Free Holidays

In an effort to boost local economies and give cash-strapped parents a break, some states are offering tax-free holidays for back-to-school shopping. Kelli Grant, Sr. Consumer Reporter for, discusses the benefits.

Every state that offered sales tax holidays last year are doing so again this year. In fact, Mississippi is also joining in as well, and this year, sales are going to be better than ever. "We've actually seen several states expanding their sales tax holidays," says Grant. "You're generally saving about four to seven percent." Parents can actually save a lot. Many states are offering discounts on clothing, shoes, textbooks, computers and more.

To get the most bang for your buck, though, Grant suggests bringing coupons along too. Look into rebates and other offers, in addition to the tax-free incentives. "Just check to make sure what your state is excluding. Some states will not consider it tax free if you're using a manufacturer's coupon or a rebate," says Grant. Each state has their own exclusions.

In addition, while some states are waving state sales tax, local sales tax is still in effect. "Most states leave it up to the city and county to determine whether they're going to continue charging the local part of the sales tax, and because of those economic woes, many are opting to continue to do so," says Grant. Check your local area before you hit the stores. By driving to another community, you may avoid the local taxes.

While many states can't really afford to do away with sales taxes in this down economy, Grant says, "many of them are banking on it being a long-term economic effect to offset some of that short term revenue loss. They're figuring retailers are going to get the much-needed foot traffic, consumers are going to get a little bit of a break and that maybe your shopping list is going to include a few items that the state can collect some sales tax on anyway."

For more information on sales tax holidays, click here to visit

By Erin Petrun