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Tax free holiday starts today

August 9, 2013

It seems like every store has some kind of back-to-school sale, so why shouldn't the state of Texas get into the act?

Parents shopping for back-to-school items for their children — and others just looking to save a little money — will get a helping hand from the state as its annual Tax Free Holiday kicks off today and runs through Sunday.

As in previous years, most clothing, footwear, school supplies and backpacks priced under $100 will be exempt from sales and use taxes — including those sold online, by telephone or mail — which could save shoppers about $8 on every $100 they spend.

The exemption applies to each eligible item that sells for less than $100, regardless of how many items are sold on the same invoice to a customer. However, the exemption does not apply to the first $99.99 of an otherwise eligible item that sells for more than $99.99. For example, if a customer purchases a pair of pants that cost $110, then sales tax is due on the entire $110.

The exemption also does not apply to sales of special clothing or footwear the manufacturer primarily designed for athletic activity or protective use, like golf cleats and football pads. Tennis shoes, jogging suits and swimsuits, however, are commonly worn for purposes other than athletic activity and thus qualify for the exemption.

The sales tax exemption also does not extend to rental clothing or footwear, nor does it apply to alteration (including embroidery) or cleaning services performed on clothes and shoes. Additionally, tax is due on sales of accessories, including jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets, watches and similar items.

Backpacks priced under $100 sold for use by elementary and secondary students are exempt during the sales tax holiday. The exemption includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and messenger bags.

Texas families also get a sales tax break on most school supplies priced at less than $100 purchased for use by a student in an elementary or secondary school. Layaways are also included in the annual tax holiday. The sale of a qualifying item under a layaway plan qualifies for exemption if the customer places the qualifying merchandise on layaway during the holiday or makes the final payment during the holiday, according to state officials.

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