The new school year is just around the corner, so now’s the time for parents and students to start compiling and executing their shopping lists if they want to snag the best prices and tax breaks.
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The National Retail Federation (NRF) reports the average American family will spend a total of $635 this year, and while that amount is 8% less than last year, back-to-school shopping can be hard on a family’s budget. To help ease the wallet pain, 16 states across the country are eliminating their state sales tax on certain clothing and supplies.
A handful of states will be offering the holiday this weekend, including: Alabama, Florida, South Carolina and Tennessee. For a complete list of all the states and their tax holidays, click here for a list from TaxAdmin.org.
Most state sales tax falls between 4% and 8%, so the holiday can help families stay within their budget, but experts warn not to overspend just because of the lack of tax.
“It’s important to shop early and to take advantage of this,” says Kathy Grannis, senior media director for the NRF. “But often times, these deals drive people to stores and they wind up spending a bit more than what they expected because the bargains are so heavy.”
2013 Sales Tax Holidays
Alabama: Aug. 2-4
Arkansas: Aug. 3-4
Connecticut: Aug. 18-24
Florida: Aug. 2-4
Georgia: Aug. 9-10
Iowa: Aug. 2-3
Maryland: Aug. 11-17
Missouri: Aug. 2-4
New Mexico: Aug. 2-4
North Carolina: Aug. 2-4
Oklahoma: Aug. 2-4
South Carolina: Aug. 2-4
Tennessee: Aug. 2-4
Texas: Aug. 9-11
Virginia: Aug. 2-4
For families facing a litany of back-to-school needs, experts offer the budget-saving tips:
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No. 1: Consider buying discounted gift cards. Going to sites like GiftCardGranny.com that sell gift cards for around 5% and 10% less than their value, can get you more for your money.
“You have built-in savings right there,” says Julia Scott, founder of BargainBabe.com. “I always try to buy these cards, even for stores I frequent the most, like CVS.”
If you stock up on a discounted gift card, use a coupon and enjoy the sales tax holiday, you could be in for a triple whammy of savings.
No. 2: Check circulars, newspaper ads and sign up for online coupons. Retailers located in tax-holiday states will most likely print additional coupons in newspapers and circulators to lure people into their stores, says Grannis, but don’t forget to check online for more discounts.
“It’s free and retailers can cater emails to hit certain people who want more information about specific holidays and deals,” she says.
No. 3: Shop early. Most sales tax holidays last throughout the weekend, but Grannis recommends hitting stores on the first day, especially if you have specific items on the list. It’s not quite Black Friday crazy, but back-to-school shopping can be intense.
“Especially if you have teenagers—chances are other kids in your town will want the exact same type of products,” Grannis says. “Those trend items go fast, so get there early because it will be crowded for sure.”
No. 4: Find out if online discounts are offered. If your state is offering a tax holiday, find out if the break extends to online purchases. For example in Virginia, online purchases will be treated as exempt if the item is delivered and paid for by the customer during the exemption period, or if the customer orders and pays for the item and the seller accepts the order during the exemption period, according to the NRF.
No. 5: Check to see which items are exempt from the sales tax holiday. Certain items will not be eligible for the tax break and this will vary from state to state. For example, in Texas, clothing and footwear under $100 are exempt, but climbing boots and ski boots are not included.