You can't beat the heat in August, but you can beat some of the sales taxes. Every August, many states celebrate and grant a tax-free week just before we send the kids back to school. So all those necessities, pencils, notebooks, sneakers, and backpacks - and YES, even Pokémon Go backpacks (real-life ones though not the ones in the game), may be purchased sales tax-free. The kids get what they need for school and you save money on sales tax with tax-free holidays.
I often say there are very few silver-bullet tax benefits that put dollars in your pocket, but there are plenty of smaller opportunities to save. Sales tax holidays are one of those opportunities. By knowing when and where to shop and buying things that qualify, you can save tens or hundreds of dollars. Just $1,000 in qualified purchases in a state with 7% sales tax that is suspended during the tax holiday could result in $70 savings - that tax money is still in your pocket! And tax savings can add up faster than a silver bullet when it comes to back to school spending.
There are 17 states with back-to-school sales tax holidays scheduled from late July through August, the eligible items and dollars amounts that qualify vary as much as the dates for the event. For example, Georgia is allowing tax-free status on computers and computer accessories up to $1,000, but Iowa only has clothing and footwear of less than $100 on the list of allowable items. It's best to be aware of the rules so you can take full advantage of events near you. Here in Florida, we get to combine the tax-free holiday with specials and coupons and merchants typically offer fantastic sales as further incentive. Last year, some items actually worked out to be less than a nickel, like notebooks and pencils. Tax holidays are listed on state tax websites, but you can check out the entire list at the Federation of Tax Administrators site. If back to school purchasing isn't a budget item for you, then maybe the other tax holidays offered might interest you.
If you live in Alabama, Florida, Georgia, Louisiana, Maryland, Missouri, Texas, or Virginia and plan your hurricane preparedness and/or energy-efficiency improvements to coincide with the sales tax breaks offered you could save big too. Many items qualify for sales tax exemption, and odds are you now need, or will need, some of those items. Of course, the more you spend, the more you save on tax-free items. In some cases, even online purchases qualify for tax-free status. So stock up when the holiday is in effect and save those dollars for something you really need or want. Some states allow purchases made during the tax-exempt holiday to qualify while others extend the exemption to allow for items delivered or ordered and paid for during the holiday to qualify. Other rules and regulations may apply so check it out before you buy. For example, states leave it up to the local governments whether to participate in tax-free holidays or not - and not all do. Simply confirm when and how to purchase on your state's Department of Revenue website if you aren't sure what qualifies.
Though it isn't actual income tax, it is protecting more of your income from taxes, which is what I like - helping you keep more of your money.