You can clip coupons and search for promo codes, but there is only one way to guarantee savings on your back-to-school shopping — avoid paying taxes.
But don’t worry; you won’t have to skirt the law to make this a reality. This year, 16 states will host tax-free weekends, where shoppers can avoid paying sales tax on certain items.
A few states (Mississippi, Tennessee and Alabama) have already completed their tax-free holidays, but this weekend marks the most widespread celebration, with nine states suspending sales tax.
So how does this work out in savings? Let’s say you’re shopping for back-to-school clothes in Iowa, where the sales tax is 6%. If you spend $200, you’ll save $12 on taxes (as long as each individual item costs less than $100). This may not seem like a whole lot of money, but it’s certainly enough to grab a few school supplies for your school-bound student.
The National Retail Federation says that Americans will spend $83.6 billion on back-to-school shopping for K-12 and college students. In South Carolina alone, officials say that shoppers have saved between $2 million and $3 million during past tax-free holiday weekends.
There is money to be saved. But before you shop, here are some things to remember:
- When a state says under $100, it means that the individual item must be under $100. So if you buy a pair of jeans for $150, it will not be tax-exempt. The exemption does not apply to the first $99.99.
- When it comes to layaway, many states will honor the tax exemption if the items are placed on layaway during the tax-free holiday or if the final payment is made during a tax-free weekend.
- Every state has different rules for what it considers to be exempt from taxes. Before you head out, read your state’s specific rules to avoid any confusion during checkout.
Tax-free weekend state guide:
Virginia: Clothing and footwear under $100 per item and school supplies under $20 per item
Florida: Clothing, footwear and accessories under $60 per item. School supplies selling for $15 or less. Personal computers and related accessories under $750 per item
South Carolina: Clothing, school supplies, and computers
New Mexico: Clothing less than $100 per unit, school supplies under $30 per unit, and computers under $1,000
Missouri: Clothing under $100 per item, school supplies under $50 per purchase, and computers under $1,500. Missouri will also remove sales tax on graphic calculators under $150 and computer software under $350
Louisiana: The sales tax exemption applies to the first $2500 of the sales price or cost price of any consumer purchase of an eligible item
Ohio: Clothing under $75 per item, school supplies under $20 per item and school instructional material under $20 per item
Iowa: Clothing and footwear under $100 per item
Arkansas: Clothing and footwear under $100 per item, clothing accessories under $50 and all school supplies
Texas: Clothing, school supplies and backpacks under $100 per item
Maryland: Clothing and apparel under $100 per item and the first $40 of a backpack purchase
Connecticut: Clothing and footwear less than $100 per item
Brittany is a reporter at Yahoo Finance.