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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

The Texas Sales Tax Holiday Turns 20 It’s the Most Wonderful Tax-free Time of the Year!

By Jackie Benton Published August 2019

You won’t see any of the parties, cakes or balloons usually associated with anniversaries as the Texas Sales Tax Holiday celebrates its 20th anniversary this Aug. 9-11 — just the annual ringing of cash registers and clacking of fingers on keyboards as Texans take advantage of the state’s three-day suspension of state and local sales taxes on qualifying clothing, footwear and school supplies under $100 in stores and online.

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All Texans can take advantage of the Texas Sales Tax Holiday this Aug. 9-11, as long as they are purchasing a qualifying item.

With many Texas families preparing for that all-important first day of school, the holiday weekend’s timing could not be better, says Texas Comptroller Glenn Hegar.

"Texas lawmakers purposefully mandated the holiday would fall on the Friday preceding the 15th day of every August to help give families an extra financial boost when getting their children ready for the school year. Texans have saved more than $1.3 billion (Exhibit 1) in state and local taxes since the holiday began in 1999. This effectively amounts to a Texas Sales Tax Holiday savings of about $8 for every $100 spent," Hegar explains.

"As Texas families begin the process of replacing their beach towels with lunch boxes, the sales tax holiday is the perfect opportunity to save some money on supplies families need before the school bell rings," Hegar says. "As a father of three, I know how these expenses can add up."

And while the holiday has become known as the "Back to School" tax-free holiday because of the number of school supplies that qualifies for the exemption, the Comptroller notes the holiday is not limited to just families with school-age children. "Anyone can take advantage of the holiday, as long as they are purchasing a qualifying item," he says.

The Texas Sales Tax Holiday comes at no financial cost to retailers — but staff should be educated about what items do and do not qualify for the sales tax break during the holiday weekend. For example, messenger bags and backpacks (even those with wheels) qualify for the exemption; suitcases, briefcases and purses do not qualify and are taxable.

Shoppers may use the tax exemption when purchasing qualifying items at traditional brick-and-mortar stores and online stores. Mail, telephone and layaway transactions are covered as well. The exemption applies to each eligible item priced below $100, no matter how many items are sold. However, the tax exemption cannot be prorated and applied to items exceeding $99.99.

For an in-depth look at the Texas Sales Tax Holiday and other state tax-exempt holidays throughout the year, read "Sales Tax Holidays" in the August 2018 issue of Fiscal Notes.

Exhibit 1

ESTIMATED TAXPAYER SAVINGS DURING SALES TAX HOLIDAY FOR CLOTHING AND SCHOOL SUPPLIES (IN MILLIONS OF DOLLARS)
State Local Combined
1999 $25.6 $7.0 $ $32.6
2000 $29.2 $7.8 $37.0
2001 $30.5 $8.1 $38.6
2002 $33.2 $8.8 $42.0
2003 $34.2 $9.1 $43.3
2004 $36.1 $10.0 $46.1
2005 $37.2 $10.2 $47.4
2006 $38.5 $10.5 $49.0
2007 $40.6 $11.5 $52.1
2008 $42.1 $11.9 $54.0
2009 $49.7 $13.7 $63.4
2010 $46.5 $12.8 $59.3
2011 $49.2 $14.0 $63.2
2012 $56.4 $16.1 $72.5
2013 $61.4 $17.5 $78.9
2014 $64.4 $18.3 $82.7
2015 $68.1 $19.1 $87.2
2016 $71.7 $20.2 $91.9
2017 $67.3 $19.7 $87.0
2018 $70.5 $20.1 $90.6
2019 $79.4 $22.8 $102.2
Cumulative $1,031.8 $289.2 $1,321.0

Source: Texas Comptroller of Public Accounts

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