Sales tax holiday this weekend can help you save
Published 9:22 am Monday, July 30, 2018
You know it’s getting close to the first day of school when sales tax weekend rolls around. Every summer, shoppers in Tennessee can buy sales tax-free school supplies thanks to a tax holiday.
The sales tax holiday, which began Friday and will continue through 11:59 p.m. Sunday, is another way to put more money back in the pockets of Tennesseans.
In addition to school supplies, some articles of clothing, footwear, and computers are exempt from sales tax. In Tennessee, customers won’t pay state or local sales tax on clothing, art supplies, or school supplies that are less than $100 per item. Computers less than $1,500 will also be tax-free according to the Tennessee Department of Revenue.
Although the break is only on items priced $100 or less, in this age of apparel inflation, it’s not hard to find clothing under that price point. And most items on school supply lists are well under that threshold.
Those savings can take a lot of stress out of back-to-school shopping; a new poll from national coupon website RetailMeNot finds that 91 percent of parents experience stress as they search for supplies. At 95 percent, moms are more likely to be anxious about back-to-school shopping, compared to 87 percent of dads, the survey discovered.
The average family is likely to spend an average of $685 on back-to-school shopping this year, according to the National Retail Federation, a trade organization. Depending on where you shop, the savings could really add up.
The bulk of that spending is for clothing, followed by electronics, then shoes, and lastly, school supplies.
The weekend of tax-free shopping is a 12-year tradition in Tennessee and a break from the 9.75 sales tax Carter Countians pay every day on school supplies, shoes, and clothing. The sales tax money may sound like a trivial amount, but if you’re spending $500 to get two or three kids back in school, that’s $50 for lunch at the mall.
Tennessee’s sales tax is 7 percent and local governments are allowed to levy up to 2.75 percent. The combined 9.75 percent represents nearly $1 on every $10 in purchases.
Critics say it’s not worth the effort and of course they can stay home. The Tennessee Comptroller’s office has forecast shoppers will save $87 million in state and local taxes this weekend. That forecasts spending of more than $1 billion on pencils, paper, sneakers, jeans, backpacks and school uniforms. More than one million students will return to the state’s public schools this month in kindergarten through 12th grade. Stores are competing for that business and will be offering discounts.
People are more confident about the economy as more jobs continue to be created and wages are starting to rise, which explains plans to spend more than last year, said the National Retail Federation’s CEO Matthew Shay.
It is not only a good weekend for businesses, but it’s good for the consumer as well.