Tax-Free Weekends and Back-to-School Shopping: What Sellers Need to Know
If you sell back-to-school products online, should you pay attention to tax-free holidays?
Over the coming weeks, various states will be turning off sales taxes for brief back-to-school shopping holidays. And with so many shoppers tackling their school supply lists during these sales tax holidays, you can bet they’ll be looking for deals online. This is one opportunity you don’t want to miss.
Why Pay Attention to Tax-Free Holidays?
For years, consumers with school-age children have flocked to stores to take advantage of state sales tax holidays. After all, that $510 per-household average is a lot easier to swallow when the final tally doesn’t include an extra $30 or $45 in taxes.
Now that shoppers are increasingly turning to e-commerce to meet their back-to-school needs, they’re eager for similar deals online.
That’s great news for online retailers, since there are plenty of instances where tax-free weekends can be applied to online purchases.
When Do Tax-Free Weekends Apply Online?
The answer varies a bit from state to state. In addition to the specifications for which items and minimum prices qualify for tax-free holidays, each state has its own approach to sales that are completed online.
For example, in states such as Florida and South Carolina (among others), qualifying items are exempted from sales tax as long as the order is accepted for immediate shipment to an address within the state — even if actual delivery occurs after the official sales tax holiday.
Of course, it’s up to the seller to ensure those exemptions are accurately applied. In some instances, the groundwork has already been laid — particularly for sellers with a strong presence on e-commerce giants like Amazon, which uses product tax codes to have exemptions automatically included with transactions. Similarly, Walmart has been known to turn off sales tax collection for listings coded as school supplies.
What Are the Sales Tax Holidays for 2019?
TaxJar’s most recent report on sales tax holidays lists when purchases of back-to-school-related items will be exempt from sales tax in 15 states:
- July 19-21: Alabama
- July 26-28: Tennessee
- July 26-27: Mississippi
- August 1-5: Wisconsin
- August 2-3: Iowa
- August 2-4: Missouri, New Mexico, Ohio, Oklahoma, South Carolina
- August 3-4: Arkansas
- August 3-5: Virginia
- August 9-11: Texas
- August 11-17: Maryland
- August 18-24: Connecticut
These tax-free weekends can be an excellent way to reach purchase-ready consumers as they seek out deals for school-related computers, clothing, footwear, books and more. If you’re not already factoring them into your back-to-school seasonal strategy, now’s the time to start.
Looking for more marketing, selling and fulfilling tips you can use to appeal to back-to-school shoppers? The e-commerce experts at ChannelAdvisor will be sharing advice as the season unfolds. Subscribe to our monthly newsletter to be updated as new resources are ready.
Editor’s Note: This post was originally published on July 17, 2018 and has been updated for accuracy and comprehensiveness.