The sales tax holiday is for everybody, not just those going back to school. It is everywhere. The state’s four percent sales tax is waived throughout the state. And most retailers carry one or more of the items covered.- From 12:01 a.m. Friday, Aug. 1, to midnight, Sunday, Aug. 3, the state’s four-percent sales tax as well as local sales taxes levied by participating governments are waived on:
- clothing priced at $100 or less;
- school supplies valued at $50 or less;
- books that cost $30 or less; and textbooks at $50 or less; and
- computers and computer equipment with a selling price of $750 or less.
- A record 291 local governments – 11 more than the 280 that participated last year when the last record was set – also will waive their sales taxes on the selected items for the three-day weekend! 233 municipalities and 58 counties have added their tax savings to the weekend.
- Nine cities join the holiday for the first time: Argo, Carrollton, Dora, Fyffe, Graysville, Malvern, Sipsey, Steele and Sylvan Springs.
- 12 localities are back after sitting out one or more years: Ashville, Brewton, Chickasaw, Clay County, Dadeville, Fayette, Hale County, Headland, Hueytown, Marion, Opp and York.
- The tax holiday falls one or two weeks out from the start of most Alabama public schools, prime time to be shopping, especially for school clothes, one of the top sellers during the weekend.
- 16 states have back-to-school sales tax holidays: 15 are in August, 11 are on the same weekend as Alabama.
- All of the surrounding states have sales tax holidays: Mississippi’s is the weekend before Alabama’s; Georgia, Florida and Tennessee have a sales tax holiday on the same weekend as Alabama.
- Alabama offers more tax free items than Mississippi or Florida. Only clothes and shoes are tax free in Mississippi, while Florida has a lower threshold for school supplies and offers no tax break for books.
- The average family with school-aged children in the South is expected to spend $670.48 on back-to-school items, about $52 more than they had been expected to spend last year, according to the National Retail Federation’s 2014 Back-to-School Survey.
- In seven of the first eight years, the sales tax holiday actually had a positive effect on state revenue! The sales tax collection growth rate in the month of August for those seven years was:
2006: 10.4 percent
2007: 4.6 percent
2008: 7.28 percent
2010: 2.4 percent
2011: 6.26 percent
2012: 2.66 percent
2013: 2.81 percent
• Even in the one negative year, sales tax collections for August exceeded pre-sales tax holiday numbers. While the $147,408,395.14 in sales tax collected in August of 2009 represented an 18.22 percent decline behind what was collected in August of 2008, tax collections for that month still exceeded the August 2005 collections of $145,482,717.74 when the state didn’t have a sales tax holiday.
• The sales tax holiday weekend is big business for retailers. The volume of business retailers do this weekend can come in right behind after-Thanksgiving or after-Christmas sales periods, especially for those that sell one or more of the tax-exempt items.