For years, you’ve said the dollar limits should be raised on goods exempt from sales tax during the state’s two annual sales tax holidays. Legislation has been proposed to adjust those dollar thresholds based on the Consumer Price Index (CPI). If passed, the Alabama Department of Revenue would adjust the values for the 2026 calendar year and every five years thereafter.
The July back-to-school tax holiday covers clothing priced at $100 or less per item, school supplies at $50 or less, books costing $30 or less, and tablets, laptops and printers up to $750. Those amounts were set in 2006. Adjusting these figures according to the CPI from December 2006 to December 2024 would raise the thresholds to $156 for clothing, $78 for supplies, $47 for books and $1,173 for the covered electronics. Under the proposed legislation, the 2026 values are to be determined by comparing the CPI change from December 2006 to December 2024 as I did here.
The price limits for the February severe-weather preparedness tax holiday were set in 2012 – supplies costing $60 or less and generators priced at $1,000 or less. According to the CPI from December 2012 to December 2024, the supply price limit would go up to $82 and generators to $1,375.
The Alabama Retail Association supports a CPI adjustment and will lobby for it during the 2025 legislative session, which starts Feb. 4 and must end on or before May 15.
Read our Retail Report email each Friday to track the progress of this and other issues that concern you.
Rick Brown
President, Alabama Retail Association
Look for this column on Page 2
of the February 2025 Alabama Retailer.
Originally published Jan. 24, 2025