Tax Law Blog: Sales Tax Holidays in Iowa and around the US

In Iowa, the first Friday and Saturday (but not Sunday) of August is Iowa’s Annual Sales Tax Holiday. All clothing and footwear considered appropriate for everyday wear and selling for less than $100 will not be subject to sales tax. Some view this as a savings of 6% (or more if there is a local option sales tax also). The Iowa Department of Revenue has thought about all the ways to work around the $100 requirement, and has rules to prevent those tactics. For examples, a store cannot sell each shoe for $60 in order to qualify when the shoes are typically sold as a pair for $120.Similarly, you cannot average the price of two items purchased as part of a "Buy one get one free" sale to get below the $100 limit. If you are so inclined to read the rules and details, the Iowa Department of Revenue provides more information on its website.

Nationwide I found it interesting to see the map of which states have sales tax holidays. The states are for the most part grouped together and are mostly in the south. (Note the holidays are not all this weekend, each state sets its own dates).

I also found it interesting to see what each states includes in the tax-exemption. The majority of states focus on back-to-school items, some include computer and school supplies. States like Alabama, Louisiana, and Virginia also have a sales tax holiday in the spring for hurricane preparedness supplies.

 

Topics:  Department of Revenue, Retailers, Sales & Use Tax, Tax Exemptions

Published In: Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Davis Brown Law Firm | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »