State officials said lay-away plans can be used again this year to take advantage of the sales tax holiday.
As in previous years, the law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.
Backpacks under $100 and used by elementary and secondary students are also exempt. The exemption during the sales tax holiday includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and 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.
The 2009 session of the Texas Legislature passed HB 1801 expanding the list of items qualifying for exemption from sales and use taxes during the annual sales tax holiday. In addition to clothes, footwear and some backpacks, Texas families also get a sales tax break on most school supplies priced at less than $100 purchased for use by a student in an elementary or secondary school.
The following is an all-inclusive list of qualifying school supplies (if priced less than $100):
- Book bags
- Cellophane tape
- Blackboard chalk
- Composition books
- Folders; expandable, pocket, plastic, and manila
- Glue, paste and paste sticks
- Index cards
- Index card boxes
- Legal pads
- Lunch boxes
- Paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper
- Pencil boxes and other school supply boxes
- Pencil sharpeners
- Writing tablets
No exemption certificate is required, with one exception. If the purchaser is buying the supplies 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.
List of Clothing, Footwear, Backpacks and their Exemption Status
Items Subject to Taxes