Texas shoppers will enjoy a break from state and local sales taxes next weekend as the state’s annual tax holiday is observed Friday through Sunday, Aug. 15-17.
“We estimate shoppers will save about $54 million in sales tax during the sales tax holiday, including approximately $42.1 million in state sales tax and $11.9 million in local sales taxes,” Texas Comptroller Susan Combs said.
The savings, which can top 8 percent on purchases in some cities - including Brownwood, Early and Bangs - are typically enhanced with even greater back-to-school discounts offered by merchants. Even though store discounts are often greater than the sales tax savings available on these three days, shoppers seem to love the opportunity to buy eligible items tax-free.
With the rising cost of gasoline, groceries and other goods, the annual clothing sales tax holiday will help families’ back-to-school budgets go farther, Combs said.
Combs announced during the tax holiday weekend, most clothing and shoes priced less than $100 can be purchased tax free. The tax break applies to both children’s and adults’ apparel, so buyers don’t have to be the parents of students or going back to school themselves to take advantage.
The shoppers’ gain is not expected to have a significant impact on sales tax collections. This is the 10th year Texas has held the tax-free weekend in August, so the lost revenue has been built into governmental budgets. In addition, sales tax revenue continues to grow throughout the state.
“Though the national economy has slowed, Texas sales tax revenue continues to grow at a healthy pace,” Combs said. “Through June, state sales tax collections for fiscal 2008 were up 6.1 percent compared to the same point in fiscal 2007. Cities’ and counties’ calendar year-to-date sales tax revenues were up an average of 5.1 percent.”
A list of items that will be tax exempt during the sales tax holiday is available on the Comptroller’s Web site at http://www.window.state.tx.us/taxinfo/taxpubs/tx98_490/tx98_490.html. A partial list will also be published in the Bulletin later this week.
Combs reminded families that school backpacks and messenger bags costing less than $100 are now included in the sales tax holiday, but school supplies are taxable.
Since 1999, the clothing sales tax holiday has saved shoppers more than $388 million in state and local sales taxes.