Tax & Accounting Blog

August Sales and Use Tax Rate Update

Indirect Tax, Tax Management Software July 28, 2010

The majority of the changes in August have to do with Back to School Sales Tax Holidays. 15 state sales tax holidays appeared in this update, including holidays in Alabama, Connecticut, Florida, Illinois, Iowa, Louisiana (including St. Charles Parish), Maryland, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia. Additionally, at the time of this publication there is one pending sales tax holiday expected to occur in Massachusetts.

Alabama

4.5% Thomasville; 1.0% Thomasville (Automotive Sales and Use Tax); 2.25% Thomasville (Manufacturing Sales and Use Tax); 2.25% Thomasville Police Jurisdiction; 0.5% Thomasville Police Jurisdiction (Automotive Sales and Use Tax); 1.125%Thomasville Police Jurisdiction (Manufacturing Sales and Use Tax); 3.0% Valley Grand; 1.5% Valley Grand Police Jurisdiction; 3.0% Valley Head; 2.0% Valley Head (Automotive and Manufacturing Sales and Use Tax); 1.5% Valley Head Police Jurisdiction; 1.0% Valley Head Police Jurisdiction (Automotive and Manufacturing Sales and Use Tax).

Sales Tax Holiday occurring from 8/6/10 – 8/8/10.

$100 or less per item on qualifying Clothing and Footwear; $750 or less per item on qualifying Computers, Computer Software, and Computer Supplies; $50 or less per item on qualifying non-business purchases of School Supplies and Textbooks; $30 or less per item on purchases of qualifying non-business purchases of Books.

Note that the exemption does not apply if goods are delivered or received outside the Sales Tax Holiday. Additionally, local authorities have the option to participate, partially participate or not participate in the Sales Tax Holiday.

Connecticut

Sales Tax Holiday occurring from 8/15/10 to 8/21/10.

$299.99 or less per item on purchases of qualifying Clothing and Footwear.

Florida

Sales Tax Holiday occurring from 8/13/10 to 8/15/10.

$50 or less per item on qualifying purchases of Clothing and Footwear; $10 or less per item on qualifying purchases of School Supplies; $50 or less per item on qualifying purchases of Books.

Note that the exemption does not apply to the sale of books, clothing or school supplies within a theme park, entertainment complex, public lodging establishment or airport.

Illinois

Sales Tax Holiday occurring from 8/6/10 to 8/15/10.

Reduced sales tax rate of 1.25% on qualifying purchases of Clothing and Footwear $99.99 or less per item; reduced sales tax rate of 1.25% on qualifying purchases of School Supplies (no limit).

Note that the reduced rate of tax applies only to school supplies used by students in the course of study. The applicable taxes for local jurisdictions are required to be collected during the Holiday period.

Iowa

Sales Tax Holiday occurring from 8/6/10 to 8/7/10.

$99.99 or less per item on qualifying purchases of Clothing and Footwear.

Louisiana

State Sales Tax Holiday and St. Charles Parish Sales Tax Holiday occurring from 8/6/10 to 8/7/10.

First $2,500 per item on qualifying non-business purchases of all Tangible Personal Property.

Note that the Sales Tax Holiday does not apply to purchases of taxable services, leases, or rentals of tangible personal property, vehicles, or food for immediate consumption.

Maryland

Sales Tax Holiday occurring from 8/8/10 to 8/14/10.

$100 or less per item on qualifying purchases of Clothing and Footwear.

Missouri

Sales Tax Holiday occurring from 8/6/10 to 8/8/10.

$100 per item on qualifying non-business purchases of Clothing and Footwear; first $3,500 per invoice on qualifying non-business purchases of Personal Computers and Computer Peripheral Devices; first $350 per invoice on qualifying non-business purchases of Computer Software; first $50 per invoice on qualifying non-business purchases of School Supplies.

Note that the exemption does not apply to the sales of books, clothing, footwear, school supplies, or computer software within the Missouri State Fair Grounds. Local authorities have the option to participate or not participate in the Sales Tax Holiday. Consumer’s Use Tax and Seller’s Use Tax are not eligible for the Sales Tax Holiday Exemption.

New Mexico

Sales Tax Holiday occurring from 8/6/10 to 8/810.

$99.99 or less per item on qualifying purchases of Clothing, Footwear, and School Supplies (Other); $1,000 or less per item on qualifying purchases of Computers; $500 or less per item on qualifying purchases of Computer Accessories; $14.99 or less per item on qualifying purchases of School Supplies.

Note that participation in the Sales Tax Holiday is optional for retailers. Backpacks for hiking and similar activities are taxable.

North Carolina

Sales Tax Holiday occurring from 8/6/10 to 8/810.

$100 or less per item on qualifying non-business purchases of Clothing, Footwear, and School Supplies; $3,500 or less per item on qualifying non-business purchases of Computers; $250 or less per item on qualifying non-business purchases of Computer Supplies; $300 or less per item on qualifying non-business purchases of School Instructional Materials; $50 or less per item on qualifying non-business purchases of Sports and Recreational Equipment.

Oklahoma

Sales Tax Holiday occurring from 8/6/10 to 8/8/10.

$99.99 or less per item on qualifying purchases of Clothing and Footwear.

South Carolina

Sales Tax Holiday occurring from 8/6/10 to 8/8/10.

No limit on qualifying non-business purchases of Clothing, Footwear, Computers, and School Supplies.

Tennessee

Sales Tax Holiday occurring from 8/6/10 to 8/8/10.

$100 or less per item on qualifying non-business purchases of Clothing, Footwear, and School Supplies; $1,500 or less per item on qualifying non-business purchases of Computers.

Texas

Sales Tax Holiday occurring from 8/20/10 to 8/22/10.

$99.99 or less per item on qualifying purchases of Clothing, Footwear, and non-business purchases of Backpacks and School Supplies.

All school supplies and backpacks for use by non-elementary and non-secondary students are taxable.

Virginia

7.0% Christiansburg (City Meals Sales Tax); 7.5% Covington (City Meals Sales Tax).

Sales Tax Holiday occurring from 8/6/10 to 8/810.

$100 or less per item on qualifying purchases of Clothing and Footwear; $20 or less per item on qualifying purchases of School Supplies.

Additional information regarding qualifying products for each state’s Sales Tax Holidays can be found at their respective Department of Revenue websites. Stay tuned for more Sales Tax Holidays occurring in September for Alaska and West Virginia.