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Plan ahead for sales tax holiday Aug. 3-4

July 12, 2012
By Susan Taylor and Laura Sternweis - ISU Extension , Estherville Daily News

AMES- Iowa's Sales Tax Holiday is Aug. 3-4. Consumers should plan ahead to get the most for their money during this annual sales tax exempt shopping weekend, said Susan Taylor, a family finance specialist with Iowa State University Extension and Outreach.

On Friday, Aug. 3, and Saturday, Aug. 4, no sales tax, including local option sales tax, will be collected on sales of most clothing or footwear having a selling price less than $100 per item, Taylor explained.

"It's a great weekend for back-to-school clothes shopping," Taylor said. "But make sure an item is on the list as exempt from sales tax so you aren't surprised at the checkout line."

For the sales tax holiday, clothing means an article of wearing apparel or typical footwear intended to be worn on or about the human body. Excluded items include watches, jewelry, sporting equipment, skis, swim fins, roller blades, skates and any special clothing or footwear for athletic activity.

"For example, jeans, socks and underwear are tax exempt during the holiday, but backpacks are taxable," Taylor said.

The Iowa Department of Revenue has a complete list of what is taxable and exempt; see www.iowa.gov/tax/educate/holiday1.html. For more information, e-mail the Iowa Department of Revenue at www.idr@iowa.gov or call 800-367-3388.

Taylor shared the following shopping tips for maximizing savings during Iowa's Sales Tax Holiday.

Make a list of what you need before you shop. Check to see which items are eligible for the sales tax holiday.

Plan ahead to get the most of the savings. Check advertisements, shop early to get the best selection and have a game plan - decide where you will shop to get the best deals.

Remember the dollar limit that applies to each item that is eligible for the sales tax holiday. The pair of shoes for $99 might be tax exempt, but the pair that costs $100 is taxable.

Check coupon, discount and rebate rules. Manufacturers' coupons can't be used to reduce an item's selling price to under $100 to qualify for the tax exemption. However, store coupons or discounts can be used to reduce the selling price of an item to less than $100 to qualify for the exemption. Rebates do not affect the selling price of an item.

Understand special conditions. For example, items already in layaway may be tax free if you pay them off during the sales tax holiday. Items you put in layaway during the sales tax holiday may not be taxable even if final payment and delivery is after the holiday.

Eligible items sold and delivered during the sales tax holiday using a rain check will qualify for the exemption regardless of when the rain check was issued. However, if a rain check is issued during the holiday, the item will not qualify for the sales tax exemption if it is sold and delivered after the holiday. Gift certificates may be used to purchase eligible items and receive the tax exemption.

 
 
 

 

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