“The sales tax holiday for back-to-school items is earlier this year”. As in prior years, consumers will not pay state or local sales tax on clothing, school and art supplies that cost $100 or less per item and computers that cost $1,500 or less. “When people simply go to a store and pick up items that catch their eye, they may realize when they get home that they should have purchased other more necessary items instead during the tax holiday”.
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Clothing and footwear items, meant to be worn next to the body and cost less than $100 per item, are exempt from sales tax this weekend. “For example, all residents of Mobile county living in the Mobile city limits will be exempt from all of the sales tax totaling 10 percent of the purchase price of qualifying products”. “That $21 might purchase a couple bags of groceries, so it does have value”, Wollan said. She recommends that consumers plan ahead so they know what they most need or want. Revenue lost through sales tax holidays will ultimately have to be made up somewhere else, either through painful spending cuts or increasing other taxes.
In Florida and Alabama, the sales tax holiday is not until August 5th through the 7th.
Many states have enacted sales tax holidays – temporary sales tax exemptions, usually applying to a small number of taxable items for a very limited period.
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ITEP added that sales tax holidays also fall short because they are poorly targeted, as wealthier taxpayers also benefit and are “often best positioned to benefit from the holidays”.
