Tax-Free Weekend: What you need to know
POSTED: Monday, August 4, 2014 - 3:49pm
UPDATED: Monday, August 4, 2014 - 3:56pm
Tax-free weekend is upon us! This Friday through Sunday (Aug. 8-10), family's across the state will look to get the best bang for their buck on back to school items.
As in previous years, most clothing, shoes, school supplies and backpacks under $100 are exempt from sales and use taxes, but there are few other things you might want to know before you go shopping:
Clothing and footwear
If your total purchase exceeds $99.99, but all items purchased are under $100, all items qualify for tax exemption. If an item above $99.99 is bought, sales tax is due on the entire amount of the item.
The exemption does not apply to sales of special clothing or footwear that the manufacturer primarily designed for athletic activity or protective use and that is not normally worn except when used for the athletic activity or protective use for which the manufacturer designed the article. For example, golf cleats and football pads are primarily designed for athletic activity or protective use and are not normally worn except for those purposes; they do not qualify for the exemption. Tennis shoes, jogging suits and swimsuits, however, are commonly worn for purposes other than athletic activity and thus qualify for the exemption.
The sales tax holiday exemption does not extend to rental of clothing or footwear; nor does it apply to alteration (including embroidery) or cleaning services performed on clothes and shoes. Additionally, tax is due on sales of accessories, including jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets, watches and similar items.
Backpacks with wheels are tax exempt if the product can be worn on the back like a traditional backpack; same exemption applies with messenger bags.
The exemption does not include items that are reasonably defined as luggage, briefcases, athletic/duffle/gym bags, computer bags, purses or framed backpacks. Ten or fewer backpacks can be purchased tax-free at one time without providing an exemption certificate to the seller.
If the purchaser is buying the items under a business account, the retailer must obtain an exemption certificate from the purchaser certifying that the items are purchased for use by an elementary or secondary school student. "Under a business account" means the purchaser is using a business credit card or business check rather than a personal credit card or personal check; being billed under a business account maintained at the retailer; or is using a business membership at a retailer that is membership based.
Layaway & Rainchecks
A sale of a qualifying item under a layaway plan qualifies for exemption if the customer places the qualifying merchandise on layaway during the holiday or makes the final payment during the holiday.
Eligible items that customers purchase during the holiday with use of a rain check qualify for the exemption regardless of when the rain check was issued. However, issuance of a rain check by a seller during the holiday period will not qualify an eligible item for the exemption if the item is actually purchased after the holiday is over even if the rain check is presented at the time of purchase.
If you sell items that do not qualify for the exemption, you may not advertise or promise that you will pay your customers' sales tax. You are prohibited from advertising that you will not collect sales tax on items that do not qualify, but you may advertise that tax is included in the sales price of the taxable items that you sell.
Qualifying school clothing, footwear and other items: http://www.window.state.tx.us/taxinfo/taxpubs/taxholiday/d/tx98_490_clothing.html
Qualifying school supplies: http://www.window.state.tx.us/taxinfo/taxpubs/taxholiday/d/tx98_490_sch_sup.html