By Blair Lozier
As inflation continues to put pressures on communities across the country, many states are implementing a sales tax holiday, or a period when specific items are exempt from states sales tax, to help encourage consumer spending and provide relief for those individuals feeling the pinch of rising costs.
A common example is a “back to school” tax holiday, which removes sales tax on items children need for school including shoes, clothing and school supplies . Recently, states have enacted emergency supplies holidays at times when natural disasters are most prevalent. The tax relief is generally focused on power generators, housing protection and materials to help recover from a disaster that occurs.
This is not a new practice — since 1997, 27 states have implemented at least one sales tax holiday. Michigan and Ohio enacted the first sales tax holidays in 1980, focused on automobile sales. A few years later, New York implemented a sales tax holiday on clothing to compete with neighboring New Jersey, which did not have a sales tax on clothing at the time. In 2021, 17 states temporarily suspended sales taxes to encourage consumer spending, particularly on goods they would purchase anyway.
Data from 1980-2017 was gathered through the Tax Foundation.
2022 Sales Tax Holidays
Back to School
This year, 16 states have enacted a “back to school” sales tax holiday stretching between July 15 and Aug. 27, with 11 of those states having holidays during Aug. 5-7. All 16 states include clothing and footwear as sales tax exemptions, and eight include school supplies, accessories and computers among the tax-exempt items. Florida’s holiday also includes learning aids.
| State | Dates | What is Included | Itemized list |
| Alabama | July 15-17 | Clothing, computers, computer software supplies, school supplies and books | Qualifying Items |
| Arkansas | Aug. 6-7 | Clothing, clothing accessories, electronic devices, school supplies, art supplies and instructional materials | Qualifying Items |
| Connecticut | Aug. 21-27 | Clothing and footwear | Qualifying items |
| Florida | July 25-Aug. 7 | Learning aid items, clothing and accessories, school supplies and computers and computer-related accessories | Qualifying Items |
| Illinois | Aug. 5-14 | Clothing, footwear and school supplies | Qualifying Items |
| Iowa | Aug. 5-6 | Clothing and footwear | Qualifying Items |
| Maryland | August 14-20 | Clothing, footwear and accessories | Qualifying Items |
| Mississippi | July 29-30 | Clothing, footwear, accessories and school supplies | Qualifying Items |
| Missouri | Aug. 5-7 | Clothing, school supplies, computers and software and graphing calculators | Qualifying Items |
| New Mexico | Aug. 5-7 | Clothing, footwear, computers and school supplies | Qualifying Items |
| Ohio | Aug. 5-7 | Clothing and school supplies | Qualifying Items |
| Oklahoma | Aug. 5-7 | Clothing and footwear | Qualifying Items |
| South Carolina | Aug. 5-7 | Clothing, accessories, footwear, school supplies, computers and backpacks | Qualifying Items |
| Tennessee | July 29-31 | Clothing, school supplies and computers | Qualifying Items |
| Texas | Aug. 5-7 | Clothing, footwear, school supplies, face masks, backpacks and school supplies | Clothing School Supplies |
| West Virginia | Aug. 5-8 | Clothing, school supplies, instruction materials, computers and sports equipment | Qualifying Items |
Energy Efficient Appliances
Four states have enacted sales tax holidays in 2022 that are designed to encourage renting, leasing or buying energy-efficient appliances. In Missouri, individual counties have the discretion about whether their merchants participate.
| State | Dates | What is Included | Itemized List |
| Florida | July 1, 2022- June 30, 2023 | Energy star appliances | Qualifying Items |
| Maryland | Feb. 19-21 | Energy Star appliances | Qualifying Items |
| Missouri | April 19-25 | Energy Star appliances | Qualifying Items |
| Texas | May 28-30 | Energy Star appliances | Qualifying Items |
Severe Weather Preparedness
Three states that are prone to emergencies or disasters enacted sales tax holidays for emergency supplies this year. Qualifying items generally include generators, batteries and various supplies under a designated dollar amount.
| State | Dates | What is Included | Itemized List |
| Alabama | Feb. 25-27 | Emergency supplies | Qualifying Items |
| Florida | May 28-June 10 | Emergency and pet evacuation supplies | Qualifying Items |
| Texas | April 23-25 | Emergency supplies | Qualifying Items |
Other Forms of Sales Tax Holidays
| State | Dates | What is Included | Itemized List |
| Connecticut | April 10-16 | Clothing and footwear | Qualifying Items |
| Florida | July 1-7 | Freedom Week sales | Qualifying Items |
| Florida | Sept. 3-9 | Skilled worker tools | Qualifying Items |
| Florida | Oct. 1-31 | Motor fuel | Qualifying Items |
| Massachusetts | Aug. 13-14 | Annual holiday | Qualifying Items |
| Mississippi | Aug. 26-28 | Second Amendment holiday | Qualifying Items |
| Nevada | Oct. 28-30 | National Guard members pay no sales tax | Qualifying Items |
| Tennessee | Aug. 1-31 | Groceries | Qualifying Items |
Costs and Benefits
Tax holidays can have a direct impact on consumers. The timing of consumer spending is often responsive to tax holidays, according to the Federal Reserve. A Massachusetts study found that sales tax holidays boost sales during the entire month of the holiday. According to economic analysts, consumers with higher income take advantage of sales tax holidays more than lower-income consumers. However, whether the holidays contribute to long-term economic activity depends on additional various internal and external factors.
Additional Resources:
2022 Sales Tax Holidays: https://news.bloombergtax.com/tax-insights-and-commentary/some-states-are-offering-sales-tax-holidays-for-shoppers-in-2022
Sales Tax Holiday History: https://itep.org/sales-tax-holidays-an-ineffective-alternative-to-real-sales-tax-reform-2021/