Sales Tax Holiday 2023

Customers love sales tax holidays, but for ecommerce businesses, they can pose a challenge. This year, the sales tax holiday 2023 will be offered by several US states, and since each state has its own rules, it’s essential to know your obligations during these periods.

To help you track sales tax holidays in 2023, we have prepared a comprehensive guide for every sales tax holiday in each state.

 

What is a Sales Tax Holiday?

A sales tax holiday is a period of time when the state or local government temporarily exempts qualifying items from sales tax to provide relief to customers. The state government announces sales tax holidays to boost economic activities and promote growth in the US.

Since most sales tax holidays are on weekends, they are also known as tax-free weekends. The following are the common types of sales tax holidays across the states. 

• Back to school:  To help parents prepare for the beginning of the school year, many states offer sales tax exemptions on specific school-related items such as clothes, shoes, school supplies, and computers in August.
• Severe weather preparedness: These holidays are more common in Southern states and allow people to prepare for emergencies during extreme weather conditions. 
• Energy Star appliance: This holiday encourages people to reduce their consumption of energy resources by purchasing tax-exempt energy-efficient appliances.

Usually, sales tax collection and remittance go two ways; the seller is responsible for sales tax collection, while the buyer is liable to pay sales tax. During a tax-free weekend, the buyers are not liable for paying sales tax on certain taxable transactions, and the sellers are prohibited from collecting it. Learn more about ecommerce sales tax to understand the compliance requirements.

 

Example

Let’s look at an example of how sales tax holidays work for a retail business.

For instance, a clothing store in Texas typically collects sales tax from customers and remits it to the government. This sales tax funds various public development projects by the state government. Texas has an annual back to school holiday around August 11-13. During those days, the company will not collect sales tax on qualifying clothing items costing less than $100.

 

Sales Tax Holidays 2023 State-By-State Schedule

Besides the five states with no sales tax, around 18  states offer one or more sales tax holidays and tax-free weekends. Below is a state-by-state guide of sales tax holidays 2023.

Note: Bookmark this blog to check in for sales tax holidays in 2023 periodically. We will update this table throughout the year to include new sales tax holidays announced by states. 

STATE DATE TYPE ELIGIBLE MERCHANDISE Alabama February 24 – 26, 2023 Severe Weather Preparedness Weather preparedness items, up to $60, including (but not limited to): Batteries Smoke detector Fuel container Fire extinguisher July 21 – 23, 2023  Back-to-School Various school-related items including: Computers, software, and computer supplies ($750 or below) School supplies (up to $50/item) Books ($30 or less) Alaska Not applicable Arizona Currently NO planned sales tax holiday Arkansas August 5 – 6, 2023  Back-to-School Clothing ($100/item or less) Clothing accessories ($50/item or less) California Currently NO planned sales tax holiday Colorado Currently NO planned sales tax holiday Connecticut August 20 – 26, 2023 Back-to-School Clothing (less than $100) Footwear (less than $100) Delaware Not applicable Florida July 1, 2022 – June 30, 2023  Children’s Diapers Children’s diapers Baby clothes Baby footwear July 1, 2022 – June 30, 2024 Home Hardening A two-year tax exemption for impact-resistant windows, doors, and garage doors.  May 27 – June 9, 2023, and August 26 – September 8, 2023 Disaster Preparedness Various disaster preparedness-related products up to $3,000, including: Batteries Fuel tanks Fire alarms Portable generators Carbon monoxide detectors May 29 – September 24, 2023 Freedom Summer Various outdoor supplies including: Fishing supplies Camping supplies Pool supplies Children’s athletic equipment July 1, 2023 – June 30, 2024 Energy Star Appliances Energy Star appliances for non-commercial use: Refrigerators (up to $4,500) Washing machines (up to $1,500) Water heater (up to $1,500) Clothes dryer (up to $1,500) July 24 – August 6, 2023 Back-to-School Various school-related items including: Clothing, wallets, and bags (up to $100) School supplies (up to $50) Learning aids (up to $30) Computers and computer-related accessories (up to $1,500) September 2 – 8, 2023 Tool Time Holiday Specific tools and equipment commonly used by skilled trade workers  Georgia Currently NO planned sales tax holiday Hawaii Currently NO planned sales tax holiday Idaho Currently NO planned sales tax holiday Illinois Currently NO planned sales tax holiday Indiana Currently NO planned sales tax holiday Iowa August 4 – 5, 2023 Back-to-School Clothing (less than $100) Footwear (less than $100) Kansas Currently NO planned sales tax holiday Kentucky Currently NO planned sales tax holiday Louisiana Currently NO planned sales tax holiday Maine Currently NO planned sales tax holiday Maryland February 18 – 20, 2023 Shop Maryland Energy Various Energy Star appliances including: Standard size refrigerators Air conditioners Boilers Heat pumps Washers and dryers Dehumidifiers August 13 – 19, 2023 Back-to-School Clothing and footwear ($100/item or less) Backpacks (only the first $40) Massachusetts August 12 – 13, 2023 Annual Tangible Personal Property (up to $2,500) Michigan Currently NO planned sales tax holiday Minnesota Currently NO planned sales tax holiday Mississippi July 28 – 29, 2023 Back-to-School Clothing (less than $100) Footwear (less than $100) August 26 – 28, 2023 Second Amendment Firearms Ammunition Hunting supplies Missouri April 19 – 25, 2023 Annual Energy Star Holiday All Energy Star-certified new appliances up to $1,500, including: Air conditioners Washers and dryers Refrigerators Heat pumps Stoves Furnaces August 4 – 6, 2023 Back-to-School Various school-related items including: Clothing ($100 or less) School supplies ($50 or less) PCs and computer devices ($1,500 or less) Computer software ($350 or less) Montana Not applicable Nebraska Currently NO planned sales tax holiday Nevada October 27 – 29, 2023 Nevada Day TPP sold to active duty national guard residing in Nevada New Hampshire Not applicable New Jersey August 26 – September 4, 2023 Back-to-School Various school-related items including: School instructional material Sports equipment Computers (less than $3,000) School supplies New Mexico August 4 – 6, 2023 Back-to-School Various school-related items including: Clothing and shoes ($100/unit or less) School supplies Computers and related devices ($1,000 or less) New York Currently NO planned sales tax holiday North Carolina Currently NO planned sales tax holiday North Dakota Currently NO planned sales tax holiday Ohio August 4-6, 2023 Back-to-School Various school-related items including: Clothing ($75 or less) Classroom instructional material ($20/item or less) School supplies ($20/item or less) Oklahoma August 4-6, 2023 Back-to-School Clothing (less than $100) Footwear (less than $100) Oregon Not applicable Pennsylvania Currently NO planned sales tax holiday Rhode Island Currently NO planned sales tax holiday South Carolina August 4-6, 2023 Back-to-School Various school-related items including: School supplies Clothing and footwear Computers and software Clothing accessories South Dakota Currently NO planned sales tax holiday Tennessee July 1, 2021 – June 30, 2023 Gun Safety Gun safes and safety devices July 28 – 30, 2023 Back-to-School Various school-related items including: Clothing and shoes ($100/item or less) School supplies ($100/item or less) Computers (up to $1,500) August 1, 2023 Food Food and food ingredients. Texas April 22 – 24, 2023 Emergency Preparedness Various emergency preparedness supplies including:  Portable generators (less than $3,000) Emergency ladders and hurricane shutters (less than $300) First aid kits, batteries, axes, fuel containers, and light sources (less than $75) May 27 – 29, 2023 Energy Star Various Energy Star appliances including: Air conditioners (up to $6,000) Dishwashers Dehumidifiers Refrigerators (up to $2,000) Ceiling fans May 27 – 29, 2023 Water-Efficieny Various water-efficient products including:  Drip irrigation hose Rain and moisture collection system Soil Plants and grass Any other item with WaterSense logo August 11 – 13, 2023 Back-to-School All items for less than $100:  Clothing Footwear Backpacks School supplies Utah Currently NO planned sales tax holiday Vermont Currently NO planned sales tax holiday Virginia Currently NO planned sales tax holiday Washington Currently NO planned sales tax holiday West Virginia August 4 – 7, 2023 Back-to-School Various school-related items including: Clothing (less than $125) School supplies (less than $50) Computers and laptops (less than $500) Sports equipment (less than $150) School instruction material (less than $20) Wisconsin Currently NO planned sales tax holiday Wyoming Currently NO planned sales tax holiday

 

Sales Tax Holiday 2023 Frequently Asked Questions

 

Do all states have a sales tax holiday this year?

No, not all states have a sales tax holiday. Among 45 states that impose statewide sales tax, around 18 states announce sales tax holidays at different times of the year. Some states have annually recurring sales tax holidays, while others announce them each year depending on the budget and other factors.

 

How should online businesses ensure compliance during sales tax holidays?

Online businesses must ensure to turn off sales tax collection for the products eligible for sales tax holidays to avoid overcharging customers. If a business fails to turn off sales tax collection during sales tax holidays, they may face legal consequences and penalties.

Instead of managing sales tax manually, businesses can opt for a reliable sales tax solution to handle tax holidays efficiently and enhance compliance. 

 

What products are included in tax free weekends?

Every state has its rules and regulations for declaring tax-exempt products during tax-free weekends. Usually, the products included in sales tax holidays are back-to-school supplies, disaster preparedness items, energy-efficient products, and ammunition.

 

When are tax free weekends in 2023?

Tax-free weekends are announced in various states at any time throughout the year. Sometimes the states may expand existing tax free weekends to benefit citizens. The states may also suspend tax free weekends when tight on budget. Refer to our schedule for sales tax holidays to learn about tax free weekends occurring in 2023.

 

Do sales tax holidays have price restrictions?

Yes, sales tax holidays may have some price restrictions, but it is not mandatory. Some states don’t set a price cap on products during sales tax holidays, and others might. Our schedule for sales tax holidays 2023 includes price restrictions on certain items as announced by each state. 

 

Ready to streamline sales tax processes? Get started with TaxHero.

Sales tax rules and regulations change frequently in all states. As a retailer, you must track your sales during sales tax holidays to ensure prompt compliance with sales tax holidays rules and regulations. Automate your sales tax compliance with TaxHero to avoid any legal penalties. Book a call to learn how we can help your business.