Sales tax holidays offer a temporary break from paying sales tax on specific items. These events have gained popularity since their introduction in the 1990s. In 2024, about 20 states will offer various tax-free shopping periods. These holidays provide savings on essential purchases like school supplies, clothing and emergency preparedness items. They also boost local economies by encouraging consumer spending during specific times.

This guide will help you navigate 2024’s sales tax holidays and maximize your savings. We’ll cover when and where these events occur, what items qualify and how to make the most of them.

Understanding sales tax holidays

Retailers don’t collect tax on qualifying items during a sales tax holiday. These periods typically last a few days but can extend longer in some states. Most holidays apply to both state and local sales taxes. However, some localities may opt out. It’s important to check local regulations before shopping.

Types of sales tax holidays

Common types of sales tax holidays include back-to-school, disaster preparedness and energy-efficient appliance holidays. Some states offer unique holidays, like Second Amendment weekends or small business Saturdays. Here’s a closer look at some of the most common sales tax holidays:

• Back-to-school holidays are the most widespread, typically occurring in late summer. They often cover clothing, school supplies and sometimes computers.
• Disaster preparedness holidays are common in states prone to hurricanes or other natural disasters. These events usually exempt items like generators, batteries and storm shutters.
• Energy-efficient appliance holidays promote the purchase of Energy Star products. These can include air conditioners, refrigerators and water heaters.

Benefits for consumers and retailers

Consumers enjoy savings on necessary purchases during a sales tax holiday. For example, a family buying school supplies and clothing can save significantly during these events.

Retailers often see increased foot traffic and sales during tax holidays. Many of them offer additional promotions to attract more customers. Tax holidays can also simplify tax compliance for retailers. During these periods, they don’t need to collect tax on qualifying items.

2024 Sales tax holiday calendar

About 20 states will offer promotions for sales tax holidays in 2024. Florida leads with multiple events throughout the year. Other participating states include:

• Alabama
• Arkansas
• Connecticut
• Iowa
• Maryland
• Massachusetts
• Mississippi
• Missouri
• New Mexico
• Ohio
• Oklahoma
• South Carolina
• Tennessee
• Texas
• Virginia

The Federation of Tax Administrators offers a complete calendar of 2024 sales tax holidays here.

In recent years Florida has expanded its offerings, including a month-long “Freedom Summer” holiday. This event covers a wide range of items from outdoor gear to event tickets. Meanwhile, Ohio has extended its back-to-school holiday from 3 to 10 days. This gives shoppers more time to take advantage of tax-free purchases. New Mexico has introduced a small business Saturday gross receipts tax holiday. This event supports local businesses by offering tax-free shopping at qualifying small retailers.

Popular categories for tax-free shopping

States offer sales tax holidays in a variety of categories. Some of the most popular categories include:

• Clothing and footwear: Many states exempt clothing and shoes, usually with a price cap around $100 per item. This typically includes everyday wear, uniforms and sometimes accessories. Items like specialty athletic gear or formal wear may not qualify. It’s important to check your state’s specific list of eligible items.
• School supplies and computers: Notebooks, pens, backpacks and even computers are often tax-free during back-to-school events. Price limits vary by state. For computers, price caps can range from $500 to $1,500. Some states also include computer accessories and software. Basic school supplies like pencils and paper usually don’t have individual price caps. However, there may be a limit on the total purchase amount.
• Energy-efficient appliances: Some states offer tax breaks on Energy Star appliances to promote energy conservation. This can include refrigerators, air conditioners and washing machines. Price caps for these items are typically higher, often around $1,500 to $3,000. Some states, like Florida, offer year-long tax exemptions on certain energy-efficient products.
• Emergency preparedness items: Coastal states often exempt items like generators, batteries and flashlights before hurricane season. This helps residents prepare for potential natural disasters. Other eligible items may include weather radios, tarps and even tie-down kits. Price caps vary widely depending on the item and state.

Tips for maximizing savings during a sales tax holiday

Tax holidays offer savvy shoppers a prime opportunity to stretch their dollars by strategically timing purchases. Some ways to make the most of sales tax holidays include:

• Plan ahead: Research your state’s tax holiday dates and qualifying items. Make a list of needed purchases. This helps you budget and helps you avoid missing out on potential savings.
• Consider timing major purchases to coincide with tax holidays: For example, wait to buy a new computer until the back-to-school holiday if possible.
• Understand item restrictions and price caps: Be aware of price limits on tax-free items. Some states have complex rules for certain categories. For example, a $100 shirt might be tax-free, but a $150 jacket may not be.
• Read the fine print on what qualifies: Some states exempt “clothing” but not “accessories.” Know the difference to avoid surprises at checkout.
• Combine with other promotions or coupons: Many retailers offer additional sales during tax holidays. Stack these deals for even greater savings. However, be aware that some stores may exclude tax-free items from other promotions.
• Consider using cash-back credit cards or shopping through cash-back websites: This can add another layer of savings to your tax-free purchases.
• Shop online: Most states extend their tax holidays to online purchases. This can save time and allow you to compare prices easily. Be sure to complete your online purchase during the tax holiday period. Some states require the order to be placed and paid for during this time, even if delivery is later.
• Know your needs: Don’t buy items just because they’re tax-free. Stick to your list of needed items to avoid overspending.
• Consider buying in bulk if you know you’ll need items throughout the year: This can maximize your tax savings on frequently used supplies.

Make the most of your sales tax holiday

Don’t let tax savings opportunities pass you by. Sales tax holidays provide excellent opportunities to save on necessary purchases. You can significantly reduce your shopping expenses by understanding when these events occur and what items qualify.

Remember to plan, know the rules for your state and combine tax savings with other promotions when possible. While the savings on individual items may seem small, they can add up to substantial amounts over time. As you plan your shopping around these sales tax holidays, remember that tax planning goes beyond just these events.

For personal and business tax planning services, consider reaching out to the specialists at BPM. Our team at BPM can help you maximize your savings and tax advantages year-round. Whether you’re a small business owner navigating sales tax complexities or an individual looking to optimize your financial strategy, our personalized approach provides tailored advice for your unique situation.

To learn how we can help you keep more of your hard-earned money during sales tax holidays and beyond, contact us.