Back-to-School Sales Tax Holiday Set for Aug.7 to 9


Special Section: Back to School 2009

The 2009 August Sales Tax Holiday begins Friday, Aug. 7 at 12:01 a.m. and ends Sunday, Aug. 9 at midnight. A sales tax holiday is a temporary period when sales taxes are not collectible or payable on all or a specific class of purchases.

This three-day back-to-school Sales Tax Holiday offers tax free shopping on school supplies that are less then $20 per item and articles of clothing, including footwear, that are less than $100 per item.
What sales tax is paid on items more than the allowable amount?

When the sales price of an item is greater than the ceiling threshold amount set for the sales price of an exempt item, whether $20 or $100, sales or use tax is due on the entire charge for the item. The sales price is not reduced by the threshold amount.

Example 1: A customer purchases a dictionary for $25. The threshold for exempt school supplies is $20. Therefore, sales tax is due on the entire $25, not just on the $5 that exceeds the threshold amount.

Example 2: Another customer purchases a shirt for $30 and a pair of shoes for $125. No sales tax is due on the $30 shirt. Sales tax is due on the $125 shoes since the cost of the shoes exceeds the threshold. Sales tax is due on the entire $125 amount, not just on the $25 that exceeds the threshold amount.

Can rebates be used to reduce the price of an item so that it qualifies for the sales tax holiday exemption?
No. A rebate occurs after a sale and does not constitute a reduction in sales price. The amount of the rebate is not considered when determining whether an item is eligible for an exemption. •