There are a lot of opportunities to save big on tax-free weekends. Many states usually hold tax-free weekends in the same period as back-to-school shopping season. Apart from back-to-school items, you’ll find savings on items such as energy-efficient appliances and disaster preparation plans.
Tax-free weekends are also known as tax holidays. Tax holidays can be used to boost the purchase of items and encourage participation in particular economic activities. In developing countries, the purpose of tax holidays is likely to extend to the attraction of foreign investment.
The application of taxes differs by region. You may still have to pay local taxes. In some regions, sales taxes are waived, while other regions may waive all local taxes. Whatever the tax law, spending within the period is expected to be tremendously high this year- running into the billions.
Different States, Different Strokes
It helps to gain a good understanding of the qualifying items for a state’s tax weekend. The qualifying items and, of course, tax rates will differ by state. Minimum requirements and purchase limits will also differ from state to state.
Alabama’s tax holiday takes place on July 19 – 21, 2019. Shoppers during the period will not have to pay taxes on certain school supplies, books, and clothing. From February 21 – 23, 2020, consumers won’t have to pay taxes on weather preparedness items valued up to $60.
The state of Arkansas has a tax holiday on the August 3 – 4, 2019. Article of clothing or footwear under $100 will be tax-free. Accessories under $50 and select school supplies will also be tax-free.
In Texas, price thresholds are considered important aspects of tax-free weekends. Items priced above certain price thresholds may be subject to taxation. Furthermore, many sports-specific clothing and accessories cannot be waived.
Tax weekends can also provide great opportunities to make more cost-effective home improvements. Regions such as Georgia ensure that consumers do not have to pay tax on products that are energy efficient and do not cost more than $1,500. Water-efficient products are also offered on the cheap, with toilets and washing machines being made tax free in October.
Saving Time and Saving Money
The great thing about tax-free weekends is that purchases can be made online. For shoppers worried about having to deal with large crowds and possible stampedes, this is a great option.
A lot of money can be saved. As the old saying goes, ‘every little bit helps.’ The average family spends $510 on back-to-school items. Families can save around $35 in taxes on a tax-free weekend. In fact, over $40 million in sales taxes could be saved.
It is important to spend enough time preparing for tax-free weekends. Revising tax legislation for a state can help to spot any new factors that could affect activities on tax-free weekends. As an example, previous instances of tax-free weekends in a state do not guarantee future tax-free weekends. Changes in laws could take place, which put a stop to further tax-free weekends.
You can double your savings by taking advantage of coupons, sales promotions, and discounts that may be available. These could ensure that savings can be increased.
Calvin Ebun-Amu is passionate about finance and technology. While studying his bachelor’s degree, he found himself using his spare time to research and write about finance. Calvin is particularly fascinated by economics and risk management. When he’s not writing, he’s reading a book or article on risk and uncertainty by his favourite non-fiction author, Nassim Nicholas Taleb. Calvin has a bachelors degree in law and a post-graduate diploma in business.