Shopping during a tax-free weekend can help you save money on common back to school expenses.
What is a tax-free weekend?
Tax-free weekend is a period of time where a state waives any state or local sales tax that typically apply to your purchases. Shopping during a tax-free weekend means you save the money you would have spent on sales tax. Since July 19, a total of sixteen states have or will host a tax-free weekend.
5 states are tax-free year-round
If you live in one of these five states, you don’t pay sales tax regardless of what time of year it is.
- New Hampshire
In Oregon, New Hampshire and Delaware, tax-free means no sales tax at all, including local taxes. However, in Montana and Alaska, local sales tax is still allowable. So, you may pay minimal local sales tax in some counties and cities.
What is included in tax-free weekend?
Most states limit the products that are exempt from sales tax during these weekends. In most cases, you can only buy clothing, shoes, accessories and electronics for school tax-free. There’s also usually a dollar limit on a single item. This is a typical break down of spending limits on back to school purchases:
|Clothing||Up to $100 per item|
|Shoes||Up to $100 per item|
|School supplies||Up to $20-50 per item|
|Computers||Up to $500-$1,000|
Again, these limits vary by state, so click on your state in the map at the top of this page to see the limits in your state. You can also click the source link in your state’s map for more information from your state.
Shop strategically on your tax-free weekend
There’s a good reason to take advantage of no sales tax if your state offers it. The back to school shopping season is the second most expensive time of year for families with kids attending school. The consumer experts at the National Retail Federation say K-12 parents can expect to spend an average of $789.49 this year. College families can expect to spend $1,059.20.
“Back to school just keeps getting more expensive each year,” says April Lewis-Parks, Education Director for Consolidated Credit. “If you want to avoid credit card debt, you need to take advantage of every opportunity possible where you can save money.”
These tips can help you save money over your tax-free weekend:
- Set a budget for how much you want to spend over the weekend. Check your budget and see how much cash flow you have available to spend that weekend. Try to avoid spending more than that, since any extra purchases would end up on credit.
- Start with the most expensive items first. For example, if you’re buying school supplies and electronics, buy the electronics first so you can make sure to get those items tax-free.
- Pair tax-free weekend with other sales to maximize your savings. This year, retailers are offering big sales to try and drive more business during the economic downturn. Look for sales and see if you can double up on savings.