Tax-free holidays allow consumers to purchase needed items without paying sales tax.
Many states offer tax-free holidays. Specific items are eligible for a tax exclusion depending on the state and type of tax holiday observed. Several states offer a tax-free weekend in August for educational items and school supplies before many schools are in session for the new school year. Other types of tax-free holidays are offered throughout the year and include energy-saving products, hurricane relief items and personal use items.
Educational Items
Several states offer a tax-free weekend for educational items during the month of August. In 2010, states participating in the holiday include Alabama, Florida, Illinois, Louisiana, Missouri, New Mexico, North Carolina, South Carolina, Tennessee, Texas and Virginia. Items in this category include most school-related supplies such as pencils, pens, erasers, crayons, markers, notebooks, paper, binders, folders, poster board, scissors, tape, glue, rulers, compasses, calculators and lunch boxes. Some states include computers and computer-related supplies with a cap ranging from $350 to $3,500. These states include Alabama, Louisiana, Missouri, New Mexico, North Carolina, South Carolina and Tennessee. Comprehensive lists are available at the Department of Revenue for each state.
Clothing Items
Fifteen states offer a tax-free period in August 2010 that exempts clothing items from sales tax. States participating in the holiday include Alabama, Connecticut, Florida, Illinois, Iowa, Louisiana, Maryland, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. Mississippi holds a tax-free weekend in July 2010 that includes clothing and footwear. Items in this category include, but are not limited to, footwear, pants, shirts, dresses, skirts, undergarments, coats, hats, scarves, belts, aprons and ties. Some sports-related clothing and footwear is non-exempt. Clothing accessories such as purses, jewelry, hair accessories, briefcases, wigs and cosmetics are generally non-exempt as well.
Energy Star Products
Energy Star is the symbol for energy efficiency backed by the U.S. Environmental Protection Agency and the U.S. Department of Energy. Certain energy-efficient products receive an Energy Star rating. The following six states offer a tax-free period for Energy Star qualified products in 2010: Maryland, Missouri, North Carolina, Texas, Virginia and West Virginia. Products that meet or exceed the Energy Star efficiency requirements qualify for tax-exempt status. Examples of such products are washers, dryers, refrigerators, air conditioners, furnaces, water heaters, trash compactors, dehumidifiers, dishwashers, ovens, stoves, freezers, ceiling fans and programmable thermostats. Some states do not include dryers in the tax-free category because they do not receive an Energy Star rating.
Hurricane Preparedness Items
Louisiana and Virginia offer a tax-free period in 2010 to help consumers prepare for the Atlantic Hurricane Season. Emergency supplies that might be needed during a hurricane are free from sales tax during the holiday. These include ice packs, batteries, self-powered light sources, radios, tarps, plastic sheets, bungee cords, rope, duct tape, smoke and carbon monoxide detectors, fire extinguishers, fuel containers, storage containers, bottled water, can openers, cell phone chargers, first aid kits, portable generators and tie-down kits.
Other Tax-Exempt Items
Louisiana and South Carolina offer a tax-free period in 2010 for certain firearms, rifles, handguns, ammunition and hunting supplies. Louisiana and Vermont hold tax-free days in 2010 for the purchase of tangible personal property up to an amount of $2,500 and $2,000, respectively.
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