While there’s usually more attention surrounding tax deadlines, it’s a better-kept secret that many state governments hold annual statewide sales tax holidays. Tax-free weekends are periods when consumers don’t have to pay any sales tax on select items.
The most common sales tax-exempt items on these holidays are school supplies, electronics, emergency supplies, and clothing. That said, if your business operates in a participating state and sells any of these items, you’ll want to be ready for an influx of customers during your state’s tax-free weekend.
Why Host These Holidays?
Tax-free weekends tend to be strategically hosted around “back-to-school” times so that students can purchase school necessities at a discounted price. This just so happens to also coincide with storm seasons in many states, which is why emergency supplies are also often among the discounted items.
Essentially, this is a great way for states to take care of their residents during a season that often demands adaptability, resilience, and yes – money.
Does My State Participate?
Sixteen states will be hosting tax-free events in 2021. While some states have gone so far as to write these holidays into law, certain states join some years and not others. Other states, including Alaska, Delaware, Montana, New Hampshire, and Oregon, never charge sales tax.
Before your business jumps into preparations for this holiday, you’ll want to be sure you know how long your state’s tax-free event lasts. For some, it’s a single weekend. For others, it’s ten days or more.
To check whether and when your state is participating in this year’s tax-free holiday, as well as which items are exempt from sales tax in each state, refer to Capital One Shopping’s visual below.