Tax-free holidays offer big savings on back-to-school shopping

By Haniyah Philogene

·August 3, 2023

Tax-free holidays offer big savings on back-to-school shopping (Photo: Adobe Stock)

As the summer draws to a close, a familiar buzz of excitement fills the air as parents and students gear up for the annual back-to-school shopping frenzy. Amidst the flurry of new backpacks, fresh stationery, and trendy school attire, one strategy stands out as a secret weapon for cost-conscious shoppers: tax-free holidays.

Tax-free holidays offer big savings on back-to-school shopping (Photo: Adobe Stock)

Designed to provide financial relief to families during the bustling back-to-school season, these limited-time events offer a golden opportunity to save big on essential supplies without the burden of sales tax. This year, the Federation of Tax Administrators reports 17 states across the nation will be participating in the sales tax holiday. Compared to last year, the list of participating states decreased as Virginia and Illinois opted out for 2023. Although inflation rates have dropped significantly, cooling down to 3% compared to the 9.1% reported in June 2022, back-to-school shopping can still be costly for families.

The National Retail Federation (NRF) reports families can expect to spend “an average of $890.07 on back-to-school items this year, approximately $25 more than last year’s record of $864.35.” In addition to the cost of clothes, shoes, and other traditional school supplies, the demand for electronic devices and accessories plays a role in this year’s increased budget, according to the NRF. With that in mind, you may have a few questions about how to leverage tax-free days.

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How can sales tax holidays help alleviate back-to-school costs?

The sales tax holiday, often called a “tax-free weekend,” refers to a specific timeframe when numerous states temporarily waive sales tax on select items. Usually limited to just one weekend, some states offer sales tax exemption for extended periods. During these times, the tax exemption eligibility of purchases is typically governed by specific criteria, including product type and price, which varies by state.

Do they actually save me money?

Ultimately, yes. Depending on the state, sales tax can range between 4% to 7%. The tax exemption on high-ticket items like electronics can be beneficial. However, families should rely on more than tax-free weekends to save money when back-to-school shopping. Before confirming a purchase, comparison shopping at various retailers is a good practice, as stores will be offering different deals and discounts leading up to the school year.

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When is my state’s tax-free holiday?

Though tax-free weekend has already occurred in some states like Alabama, Mississippi, and Tennessee, there is still a chance to save money in the following states: