Do you need a reason to shop this weekend?
Tax-free shopping in stores and online starts Friday at 12:01 a.m. and ends midnight Sunday. The event is just in time for back-to-school purchases but not limited to households with children.
This will be the 24th year for the sales tax holiday, the rules of which are established by the Texas Legislature. This year, 19 other states have various versions of sales tax holidays.
Sales tax will be exempt on items such as clothing, shoes, school supplies and backpacks that are priced below $100. The savings in Dallas and most cities amounts to 8.25% in state and local sales taxes.
There’s one more essential category that people forget about: diapers. Both adult and baby diapers are tax-exempt this weekend. But tampons and other menstrual-care products are still taxed.
In the Southwest, neighboring states have synchronized sales tax holidays with Texas, knowing that lots of shoppers cross a state border to shop. Oklahoma and New Mexico are having theirs the same weekend. Louisiana ditched its sales tax holiday a few years ago, so some of its residents may head west to Texas this weekend.
The Texas Comptroller estimates that shoppers will save $112 million in sales taxes this weekend. But it doesn’t sound like the state treasury will miss it much.
Texas can afford it
Texas just added $14 billion in tax receipts to make a tidy $40 billion state surplus. Population growth and a strong recovery in energy prices from the historic lows of the pandemic have contributed to the boom.
Texas Comptroller Glenn Hegar said Sunday on The Dallas Morning News and KXAS-TV (NBC5)′s Lone Star Politics program that the only sales tax category down from last year is cigarettes and tobacco.
But things are costing more, and that may make saving 8.25% a bigger deal for family budgets. It’s not unusual for parents to spend several hundred dollars on back-to-school purchases. Receipts totaling $500 will net a savings of $41.25 that can be used for something else.
“With inflation driving prices higher on just about everything, this sales tax holiday provides Texas families some small relief managing the costs,” Hegar said, adding that he’s a father of three school-age children and knows how “expenses can add up.”
Sales tax is the largest source of state funding in Texas, representing 59% of all all tax collections.
New comptroller sales tax disbursements released Monday from June retail sales revealed that consumers are still spending at high levels for auto repairs and home improvements, but general merchandise and online purchases were up more modestly.
June receipts from clothing stores were flat from a year ago, and electronics and appliance store sales declined, Hegar said.
Parents may wait to go shopping closer to the start of school, which is Aug. 15 in Dallas. According to one survey conducted by Deloitte, Dallas-Fort Worth parents plan to spend more than the U.S. average on back-to-school items.
What does tax free weekend include?
The list of items on the state’s website is specific about what is and isn’t tax exempt. Lots of recreational and sports-related accessories such as ice skates, ski boots, knee pads, golf gloves and cleats are still taxed. But it’s worth checking the list. While pajamas, nightgowns and robes aren’t worn to class, they are tax-exempt this weekend.