Tax & Accounting Blog

Sales Tax Holidays in The Quad Cities

Indirect Tax, Tax Management Software July 8, 2010

Residents of the Quad Cities will now have more options for tax-free back to school shopping. On Wednesday Illinois Governor Patt Quinn signed into law a sales tax holiday on back-to-school items that will run from August 6Th to August 15Th. The new holiday will overlap Iowa’s holiday which lasts only two days — August 6Th and 7Th this year. Most school supplies as well as clothing costing less than $100 dollars are included in the Illinois holiday.

The Illinois’ sales tax holiday will apply only to the state sales tax, local sales taxes still will be collected. In Iowa however, both local and state taxes are waived during their two-day holiday.

Officials in both states are not sure yet what effect the new holiday will have on shopping patterns. My guess is at least for the days when they’re overlapping, people will stay on the Iowa side of the river,” said Mike Lipsman, manager of the tax research section at the Iowa Department of Revenue. He also believes that it’s possible that Illinois shoppers who had been traveling across the river to Iowa on sales tax holidays will stop doing so.

It is estimated that the week-long suspension of state sales tax will cost Illinois $40 to $60 million per year.

To Read More: Quinn OKs sales tax holiday for back-to-school supplies