Sales tax holidays bring savings
Some states will exempt school supplies, clothes and other items from tax. Make sure you're getting the best deal.
If you've been thinking of buying clothing, school supplies or even a new computer, the next few weeks could be the time to shop.
Sixteen states are offering sales tax holidays on specific back-to-school items, and many start this weekend. Mississippi's tax holiday was last weekend. Two states that previously had tax-free shopping periods, Georgia and Vermont, elected not to offer the discount this year.
In most of the states, clothing and footwear purchases under $50 or $100 per item qualify, and in many states school supplies are exempt from tax.
In a handful of states -- Alabama, Missouri, New Mexico, North Carolina, South Carolina and Tennessee -- you can get a sales tax exemption on computers and/or computer software.
In Louisiana, nearly every purchase of items that cost less than $2,500 (except for cars) is exempt from state sales tax Aug. 6-7, but not from local sales tax. Missouri also lets cities decide whether to waive the local sales tax.
What can you save during tax-free week or weekend? Sue Stock of the News & Observer in Raleigh, N.C., did some math. With a 7.75% tax rate (5.75% state and 2% local), you can expect these savings:
- On $40 in basic school supplies: $3.10.
- The $261.65 on clothes and shoes the National Retail Federation predicts the average family will buy: $20.28.
- A new $1,199 Mac laptop computer: $92.92.
If your state doesn't have a sales tax holiday, don't despair. A sales tax exemption really equals only 10% or less off the price. Many stores are offering much better deals at other times, even if you do pay sales tax. Know your prices and shop smart.
Some states offer additional sales tax exemption periods for other purchases during the year, such as for energy-saving appliances. You can find a complete list here.
In five states, every week is tax-free: Alaska, Delaware, Montana, New Hampshire and Oregon don't have a general sales tax.
Stock at the News & Observer interviewed bargain-shopping North Carolina moms, who offered some advice about saving on school supplies and where the tax-free period fits in.
The top advice from Lynn Lewis, mother of three boys: Shop early in the morning.
You couldn't pay me to be at Wal-Mart at noon with 8 million people. Shoot me with a gun. You kind of feel like it's a little bit of a safety hazard.
Stock offers her advice here. Other advice from frugal moms she interviewed:
- Stock up on school supplies when they're on sale, throughout the year. Look for big-ticket items during tax-free week.
- If you see a good deal, buy it and don't wait for the tax-free period. It might be full price then and your savings would be less.
- Look for manufacturer and store coupons, which are plentiful this year. Some of those coupons could lower the price of higher-priced items that otherwise would not qualify for the tax exemption.
- Shop at thrift stores for uniforms and school clothes. If you don't see what you need the first time, keep coming back. Stock changes every day.
More from MSN Money:
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Even those who don't like to shop are probably hitting the stores this month. Here's what to be on the lookout for and here's what to avoid.