Some states have special state-wide tax-free weekends or weeks. However, some retailers have learned that people respond better to “tax-free” than they do to “5 percent off.” They hold special sales where they offer the tax equivalent of a store-wide discount on all taxed items. These events may be a better deal than the state tax-free shopping days because the retailers also usually discount any county, city, or parish tax.
Retailers who offer tax-free shopping days usually schedule them either for once or twice a year or for roughly once a month. The most common times for a monthly tax-free shopping day is either the first, or last weekend in the month. This scheduling is because many people are paid at the beginning of the month.
Retailers who schedule their tax-free shopping days annually always schedule them for Black Friday, the Friday immediately after Thanksgiving Thursday. Many of these retailers also add a second tax-free shopping day or weekend in spring. This date varies, but it often falls sometime in the last weeks leading up to Easter.
Some states offer a special tax-free weekend or week to encourage retail spending. The tax holiday applies only to the state sales tax. It may be offered for just a single year or annually. In 2012, 18 states offered tax-free shopping days.
Some states may divide their tax-free days into 2 or more parts, each dedicated to a different retail category. As of 2012, the broad categories are school-related shopping, hurricane preparedness, Energy Star and WaterSense products, and firearms. Louisiana also includes ammunition and hunting supplies.
However, a few states are working their way towards an all-inclusive tax holiday. Louisiana and Massachusetts currently offer two days in August when state sales tax is dropped on all eligible tangible personal property. Louisiana also offers other tax-free shopping days, but Massachusetts does not.
Every state which offers this program has between twp and seven days in August for tax-free shopping on clothing and school supplies. Some states also allow tax-free shopping on computers, instructional material, and sports equipment during this time.
Hurricane preparedness tax-free days are usually held in the last week of May, although Alabama’s is currently in July. Hunting and firearms tax-free days are held sometime between September and November. Tax-free shopping days for Energy Star and WaterSense products are not consistent, although more states offer them in fall than at any other time.
Virginia has the most tax-free shopping days, at 14. However, those 14 days are divided into 3 separate parts. May 25 to 31 was hurricane preparedness week, with generators under $1,000 and other eligible items under $60 being tax free. August 3 to 5 was the school-supply weekend, with clothing under $100 and school supplies under $20 being tax free. October 5-8 is a special tax holiday to promote the purchase of Energy Star and WaterSense products under $2,500 for domestic use.
The items which can be purchased tax-free are limited. Most also have a price ceiling, but some do not. Where there is a price ceiling, it is per item, not by total. Where an item exceeds the price ceiling, tax is usually charged only on the part that exceeds the price ceiling.