Shoppers are on alert in Texas and Maryland this weekend. Back-to-school sales tax holidays are on tap in these two states.
Here are the tax-free shopping details for my current and former states of residence.
TEXAS
Friday Aug. 8 through Sunday, Aug. 10
The Lone Star State kicks off this final flurry of back-to-school shopping today. Between now and stores' close of business on Sunday, Texans can pick up most clothing, footwear, school supplies and backpacks priced under $100 sales tax free.
Texas' state sales tax rate is 6.25 percent, but cities, counties, special purpose districts and transit authorities also can impose a sales tax of up to 2 percent. During the holiday, eligible items also are exempt from those local sales taxes, meaning shoppers could save $8.25 on every $100 they spend.
But shop carefully. There's lots of fine print as to what is and isn't tax-free this weekend in Texas stores. For example, a qualifying item purchased under a layaway plan is tax free as long as the customer places the merchandise on layaway or makes the final payment during the holiday weekend.
The tax exemption does not apply, however, to the first $99.99 of an otherwise eligible item that sells for more than $99.99. For example, if a customer purchases a pair of pants that costs $110, then sales tax is due on the entire $110.
And be careful backpack buyers.
Backpacks priced under $100 sold for use by elementary and secondary students are exempt during the sales tax holiday. This covers a pack with straps so it can be worn on the back.
The exemption includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and messenger bags. But it doesn't include items that are reasonably defined as luggage, briefcases, athletic/duffle/gym bags, computer bags, purses or framed backpacks.
The Texas Comptroller's website has special pages to help shoppers: FAQs; a list of qualifying clothing, footwear and other items; and a list of qualifying school supplies.
MARYLAND
Sunday, Aug. 10 through Sunday, Aug. 16
If I still lived in the Old Line State, I'd be getting ready for its week-long sales tax free event that starts on Sunday.
During the coming week, qualifying clothing and footwear priced $100 or less will be exempt from Maryland's six percent sales tax.
But that's it. Clothes and shoes only. Nothing else, not even school supplies, are tax-free next week.
Also be careful as to what attire is covered. Sellers will still collect sales tax on accessories, including jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, belt buckles, and backpacks.
And special clothing or footwear designed primarily for protective use and not for normal wear, such as football pads, will be taxable.
Pay attention to the dollar limits, too.
In Maryland, each qualifying article of clothing or footwear selling for $100 or less will be exempt, regardless of how many items are sold at the same time. For example, you buy two $60 sweaters. Both are tax exempt, even though your total purchase price is more than $100.
But if a suit costs $110, sales tax is due on the entire $110.
The Maryland Comptroller has special Web pages with more details: FAQs; a fact sheet; and a list of qualifying (or not) clothing.
Two more to come: Texas and Maryland are just two of the final four states holding sales tax holidays in August.
Coming up later this month are tax-free events in Massachusetts, the Aug. 16-17 weekend, and Connecticut, another week-long event from Aug. 17-23.
As those state's tax holidays near, I'll post the event specifics.
Image of shopper courtesy of stockimages|FreeDigitalPhotos.net
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