Sales Tax Holiday this weekend
This Friday through Sunday, August 11 - 13, is the official Texas Sales Tax Holiday.
Texas State Comptroller Glenn Hegar encourages all taxpayers to support Texas businesses while saving money on tax-free purchases of most clothing, footwear, school supplies and backpacks (sold for less than $100) during the annual Tax-Free weekend. Qualifying items can be purchased tax free from a Texas store or from an online or catalog seller doing business in Texas. In most cases, you do not need to give the seller an exemption certificate to buy qualifying items tax free.
The sales tax exemption applies only to qualifying items you buy during the sales tax holiday. Items you buy before or after the sales tax holiday do not qualify for exemption, and there is no tax refund available.
Qualifying Items include:
- Certain Clothing & Footwear under $100
- Certain School Supplies under $100
- Face Masks (not N-95 or athletic)
- Certain Backpacks under $100
During the holiday you can buy qualifying items in-store, online, by telephone, mail, custom order, or any other means. The sale of the item must take place during the specific period. The purchase date is easy to determine when the purchase is made in-store but becomes more complicated with remote purchases. The purchaser must have given the consideration for the item during the period even if the item may not be delivered until after the period is over.
Additional Charges Affect the Sales Price
Delivery, shipping, handling and transportation charges by the seller are part of the item’s sales price.
Since clothing, backpacks and school supplies have to be less than $100 to qualify, you have to look at the item’s total sales price to determine if you can buy it tax free.
For example, you buy a pair of jeans for $95 with a $10 delivery charge for a total price of $105. Because the jeans’ total price is more than $100, tax is due on the entire $105 price.
If a delivery charge is billed per item, and an invoice has both exempt and taxable items, only the qualifying exempt item’s delivery charge is exempt.
If the delivery charge is a flat rate per package, and the amount charged is the same regardless of how many items are included in the package, the total charge can be attributed to any one of the items in the package.
Sales Tax Holiday Refund Requests
If you pay sales tax on qualifying items during the sales tax holiday, you can ask the seller for a refund of the tax paid. The seller can either grant the refund or provide their customer with Form 00-985, Assignment to Right to Refund (PDF), which allows the purchaser to file the refund claim directly with the Comptroller’s office.
For kits of school supplies that contain exempt items, as well as taxable ones, the taxability depends on the value of exempt or taxable items in it. There is no limit on the quantity of school supplies in a kit, but if the value of the exempt items is more than the taxable ones, the kit is exempt. If the value of the taxable items is more than the exempt ones, then the kit is taxable.
For a comprehensive list of eligible items and other rules, visit https://comptroller.texas.gov/taxes/publications/98-490/.