Sales tax holiday set for August 17-19

AUSTIN -- In 2012, Texasshoppers get a break from stateand local sales taxes on Aug. 17,18 and 19 — the state’s annualtax holiday. Lay-away planscan be used again this year totake advantage of the sales taxholiday. As in previous years,the law exempts most clothing,footwear, school supplies andbackpacks priced under $100from sales and use taxes, whichcould save shoppers about $8on every $100 they spend.Clothing and FootwearRetailers will not be requiredto collect state and local salesor use tax on most footwearand clothing that are sold for less than $100 during the holiday.The exemption applies toeach eligible item that sells forless than $100, regardless ofhow many items are sold onthe same invoice to a customer.For example, if a customer purchasestwo shirts for $80 each,then both items qualify for theexemption, even though thecustomer’s total purchase price($160) exceeds $99.99.The exemption does not applyto the fi rst $99.99 of an otherwiseeligible item that sellsfor more than $99.99. For example,if a customer purchasesa pair of pants that costs $110,then sales tax is due on the entire$110.The exemption also does notapply to sales of special clothingor footwear that the manufacturerprimarily designed forathletic activity or protectiveuse and that is not normallyworn except when used for theathletic activity or protectiveuse for which the manufacturerdesigned the article. For example,golf cleats and footballpads are primarily designed forathletic activity or protectiveuse and are not normally wornexcept for those purposes; theydo not qualify for the exemption. Tennis shoes, jogging suits and swimsuits, however, are commonly worn for pur-poses other than athletic activity and thus qualify for the exemp-tion.Additionally, tax is due on sales of accessories, including jewelry, handbags, purses, brief-cases, luggage, umbrellas, wal-lets, watches and similar items.The sales tax holiday exemp-tion does not extend to rental of clothing or footwear; nor does it apply to alteration or cleaning services performed on clothes and shoes. These items continue to be subject to state and local sales or use tax.BackpacksBackpacks under $100 and used by elementary and sec-ondary students are exempt. A backpack is a pack with straps one wears on the back. The ex-emption during the sales tax holiday includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and mes-senger 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 pro-viding an exemption certificate to the seller.School SuppliesTexas families also get a sales tax break on most school sup-plies priced at less than $100 purchased for use by a student in an elementary or secondary school.The following is an all-in-clusive list of qualifying school supplies (if priced less than $100):BindersBook bagsCalculatorsCellophane tapeBlackboard chalkCompassesComposition booksCrayonsErasersFolders; expandable, pocket, plastic, and manilaGlue, paste and paste sticksHighlightersIndex cardsIndex card boxesLegal padsLunch boxesMarkers (including dry erase markers)NotebooksPaper; loose leaf ruled note-book paper, copy paper, graph paper, tracing paper, manila pa-per, colored paper, poster board, and construction paperPencil boxes and other school supply boxesPencil sharpenersPencilsPensProtractorsRulersScissorsWriting tabletsNo exemption certificate is required - with one exception. If the purchaser is buying the sup-plies under a business account, the retailer must obtain an ex-emption certificate from the pur-chaser certifying that the items are purchased for use by an el-ementary or secondary school student. “Under a business ac-count” 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 busi-ness account maintained at the retailer; or is using a business membership at a retailer that is membership based.List of Clothing, Footwear and Backpacks, and Their Ex-emption Status During the Sales Tax HolidayTAX-FREETAXEDBaby clothesBackpacks for use by elemen-tary and secondary studentsBelts with attached bucklesBoots - cowboy, hikingCaps/hats - baseball, fishing, golf, knittedCoats and wrapsDiapers - adult and babyDressesGloves (generally)Gym suits and uniformsHooded shirts and hooded sweatshirtsHosieryJacketsJeansJerseys - baseball and footballJogging apparelNeckwear and tiesPajamasPants and trousersRaincoats and ponchosRobesShirtsShoes - sandals, slippers, sneak-ers, tennis, walkingSocks (including athletic)ShortsSuits, slacks, and jacketsSweatshirtsSweat suitsSweatersSwimsuitsUnderclothesWork clothes and uniformsAccessories (generally) - bar-rettes, elastic ponytail holders, wallets, watchesBackpacks - unless for use by elementary and secondary stu-dentsBaseball cleats and pantsBelt buckles (without belt)Boots - climbing, fishing, rub-ber work boots, ski, wadersButtons and zippersCloth and lace, knitting yarns, and other fabricsDry cleaning servicesFootball pantsGolf glovesHandbags and pursesHandkerchiefsHelmets - bike, baseball, foot-ball, hockey, motorcycle, sportsLeather goods - except belts with buckles and wearing apparelPads - football, hockey, soccer, elbow, knee, shoulderPersonal flotation devicesRented clothing (including uniforms, formal wear, and cos-tumes)Roller blades and skatesSafety clothing, glassesShoes - bicycle (cleated), bowl-ing, golfFor information on how to re-port tax on these sales, please visit Reporting Sales Tax on Tax-Free Items.