Tennessee’s Tax Holiday set to begin Aug. 5

By Christen Coulon

Back to school items tax-free for three days

Tennessee will hold its annual back to school Sales Tax Holiday Aug. 5-7. During this time, most back to school items will be exempt from sales tax at local retailers.

Tax-free items include clothing with a priced less than $100 per item, school and school art supplies priced less than $100 per item and computers priced less than $1,500.  

“It’s a great opportunity for merchants to sell products that fall under the items covered,” said Russell Ingle, Director of Chamber Programs for the McNairy Regional Alliance. “They should be aggressively marketing those items during the tax holiday.”

Many people may have the misconception that the tax holiday is just for parents and students, Ingle said, but it’s not just for them; anyone may purchase covered items tax free during this time.  

McNairy County’s location as a Mississippi border county puts it in a unique position to benefit from the holiday. Even though Mississippi plans its own holiday this year, Tennessee offers a much wider variety of tax free  items than its southern neighbor.

“For those (Mississippi residents) close to the state line, the tax holiday is a great opportunity,” Ingle said.

Many McNairy County businesses are poised to take advantage of the holiday, but those that stand to gain the most are computer stores. Consumers can save up to $149.99 in tax discounts on individual computer purchases during the weekend.

 “We have been doing the Tax Free Holiday for years,” said Joe Vaughn, owner of Cyber Tech Systems in Adamsville. “In the past it has helped out a lot. When you are selling big ticket items, the tax is a big part of the price.”

Vaughn said that he plans to offer additional discounts during the holiday to entice shoppers who may be on the fence about buying a computer. He said that many people will come in beforehand to see what kind of deals will be offered. 

This year, Cyber Tech will be offering high-end ASUS brand laptop computers for an additional $200 off. 

“During the holiday, we may sell up to 10 additional computers verses normal,” Vaughn said. 

For more additional information on this year’s Tax Free Holiday call (800) 342-1003, Monday - Friday, 8 a.m.-5 p.m. or visit www.tn.gov/revenue/salestaxholiday/ for restrictions and a full list of the items being offered. 

Frequently asked questions

 (Provided by www.tn.gov/revenue) -- When is the sales tax holiday? Tenn. Code Ann. Section 67-6-393 establishes annual sales tax holidays in Tennessee. The holiday starts each year at 12:01 a.m. on the first Friday in August and ends at 11:59 p.m. on the following Sunday.

What items qualify for the sales tax holiday? During the holiday, the following items are exempt from sales and use tax: 1) clothing with a price of $100 or less per item; 2) school and school art supplies with a price of $100 or less per item; and 3) computers with a price of $1,500 or less per item.

How do I claim the exemption? The exemption is based on the purchase of items that qualify for the holiday. No identification or exemption certificate is required. As long as you purchase an item that qualifies to be sold tax exempt, you should not pay sales tax on the item sold.

What merchants are participating in the sales tax holiday? Merchants who sell the items listed above must participate in the sales tax holiday. If a merchant sells only to other businesses (purchases for a business do not qualify for the holiday), or does not sell items that qualify for the holiday (example: a car dealer) then the merchant is NOT required to participate in the holiday.

What items of clothing qualify? Clothing is defined as human wearing apparel suitable for general use. This includes shirts, dresses, pants, coats, gloves and mittens, hats and caps, hosiery, neckties, belts, sneakers, shoes, uniforms whether athletic or non-athletic, and scarves. Clothing DOES NOT include belt buckles sold separately, patches and emblems sold separately, sewing equipment and supplies or sewing materials that become part of “clothing” such as thread, fabric, yarns and zippers.

What qualifies as a computer? A computer is defined as a central processing unit (CPU), along with various other components including monitor, keyboard, mouse, cables to connect components, and preloaded software. While the CPU may be purchased separately, other items must be part of a bundled computer package in order to be eligible.
Excluded from the holiday are individual computer parts, such as monitors, keyboards, speakers, and scanners when not sold in conjunction with a CPU; individually purchases software or other software not part of a preloaded software package on the initial purchase of a computer; storage media, such as diskettes and compact disks; handheld electronic schedulers; personal digital assistants (PDAs); video game consoles; and computer printers and supplies for printers, such as paper and ink.

Do school textbooks or workbooks qualify for the holiday? School textbooks and workbooks are exempt from sales tax. They do not qualify for the holiday because they fall within the school instructional material exception. However, because they are already exempt from tax, no holiday is necessary on these items.

Does computer software qualify for the holiday? No. While computers with a price of $1,500 or less may be purchased exempt from tax during the holiday, purchases of computer software are excluded from the holiday and are subject to tax.

Is there a limit to the number of items that may be purchased? There is no limit to the quantity of items that may be purchased as long as the purchase price of each of those items is below the threshold provided in the law.