Save on Sales Tax During Back-to-School Shopping
American families are expected to spend $83.6 billion on back-to-school shopping in 2017, according to an annual survey from the National Retail Federation.
"Back-to-college spending is expected to hit an all-time high this year while back-to-school spending is expected to see its second-highest spending level on record," according to the NRF.
[See: Avoid These Common Pitfalls During the Back-to-School Shopping Trip.]
With school supplies to purchase and dorms to furnish, many parents and students are eager to trim costs. Every year, budget-conscious shoppers take advantage of sales tax holidays -- a once-per-year event in select states when customers can purchase eligible school essentials tax-free.
Unfortunately, with August well underway, many state sales tax holidays have come and gone. Alabama, Arkansas, Florida, Iowa, Louisiana, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas and Virginia ran their sales tax holidays earlier this summer. The year's final two sales tax holidays are fast approaching, with Maryland's tax holiday running from Aug. 13 to Aug. 19, and Connecticut's tax holiday running from Aug. 20 to Aug. 26.
But there is hope for last-minute shoppers yet. There are several states that let consumers shop school essentials and other purchases, free of sales tax, all year long, and still others exempt certain items from sales tax year-round.
Here is the complete list of states where you can purchase school supplies with no (or very little) sales tax all year long.
[See: 12 Shopping Tricks to Keep You Under Budget.]
States with no sales tax year-round:
-- Alaska. Note that while Alaska doesn't impose a statewide sales tax, it does permit localities to enforce a local sales tax. Local sales taxes in Alaska range from 0 to 7 percent, putting the statewide average at around 1.75 percent. You may have to pay sales tax on back-to-school essentials in select cities in Alaska, including Juneau (5 percent sales tax), Homer (7.5 percent sales tax) and Nikiski (3 percent sales tax). You can, however, avoid paying sales tax in cities such as Anchorage and Fairbanks.
-- Delaware. Delaware doesn't impose a state or local sales tax, but it does impose a gross receipts tax on businesses, which takes a percentage of total receipts from goods and services sold. These rates range from 0.1006 percent to 0.7543 percent, depending on business activity. Though shoppers are not taxed directly, school supply, clothing and electronics prices in Delaware may be slightly higher because of the gross receipts tax on the stores selling these back-to-school buys.
-- Montana. Montana doesn't impose a statewide sales tax, instead relying largely on income taxes to fund local government operations. Montana also imposes taxes on select items, including tobacco and gasoline. Back-to-school essentials, such as school supplies, electronics and clothing, however, remain tax-free all year long.
-- New Hampshire. Like Montana, New Hampshire doesn't have a statewide sales tax, but does impose sales tax on select items. When shopping in New Hampshire, you may not have to pay a sales tax on school supplies, electronics and other back-to-school essentials.
-- Oregon. Oregon also depends heavily on income tax, which typically falls in the top 10 percent of the country. In cities across Oregon, resident and visiting shoppers can stock up on everything from notebooks and pens to laptops and iPads, free of sales tax.
[See: 10 Money-Saving Websites to Check Before Shopping.]
States that exempt select items from sales tax year-round. Many states exempt food from sales taxes, while others exempt prescription and nonprescription drugs. These states fully or partially exempt certain types of clothing. All year long, you can shop for school uniforms, picture-day outfits and more without paying sales tax in these states:
-- Massachusetts. Clothing is exempt up to $175. Certain clothing and footwear designed for athletic or protective use may be taxable.
-- Minnesota. Clothing is exempt, but certain clothing and footwear designed for athletic or protective use and fur items are taxable.
-- New Jersey. Clothing is exempt, but certain clothing and footwear designed for athletic or protective use and fur items are taxable.
-- New York. Clothing is exempt up to $110.
-- Pennsylvania. Clothing is exempt, but certain clothing designed for athletic use, formal clothing, accessories and fur clothing are taxable.
-- Rhode Island. Clothing is exempt up to $250, but certain clothing and footwear designed for athletic or protective use and accessories are taxable.
-- Vermont. Clothing is exempt, but certain clothing and footwear designed for athletic or protective use and accessories are taxable.
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