A blog for all things retail and licensing.

What To Know About Sales Tax Holidays

Guest Blog by Will Frei

Every year, there are periods of time in certain states where governments will waive the sales tax on purchases to help propel growth of a certain sector or industry.

Now these sales tax holidays are a bargain for shoppers. These “holidays” mean tax-relief on items like back to school supplies, energy saving products, disaster preparedness items, and even firearms.

For retailers, sales tax holidays can be both a positive and negative thing. For one, these holidays can generate increases in sales. Yet they also mean the added stress of managing different tax rules and rates for a portion of their inventories. The stress grows exponentially for businesses that have to manage these holidays in multiple states. In 2012 alone, there were over 2,000 state sales tax holiday rules in the U.S. for retailers to keep straight.

There are 4 things that businesses have to be aware about when it comes to sales tax holidays:

  • Rate: During a sales tax holiday, the rate of tax will be lowered or may even completely disappear. Business owners need to be aware of what exactly is happening.
  • Exceptions: Many sales tax holidays have exceptions based on things like coupons, layaways.
  • Dates: When is the holiday happening, when do you need to adjust and adjust back.
  • Changes: States are changing rules from year to year, some keep changing up until the very last minute.

Businesses selling any applicable items during a sales tax holiday need to adjust their sales tax rates accordingly, taking into account various exceptions and local tax rates. This can be a massive headache, especially if you need to keep track of holidays in multiple states. To help ease the pain, below is a list of 2013 sales tax holidays in the U.S.  as well as sales tax holidays what have been “celebrated” in the past that may return this year as well.

Sales tax holidays already announced

Past sales tax holidays that may return this year

 Will Frei is Social Media Manager at Avalara.

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