We’re calling it. Texas is officially into its second generation of back-to-school, tax-free shopping.
Millennials bred in the state are not only the first digital natives, but they are also the first group of Texans who weren’t around the last time one weekend of shopping in August wasn’t tax-free.
Five-year-olds heading into kindergarten in 1999 for the state’s first tax-free weekend are now 24 or 25 and may have their own 5-year-old to take school shopping.
The 20th year for tax-free shopping in Texas starts Friday at 12:01 a.m. and ends at midnight on Sunday. During that time, shoppers won’t be charged state and local sales taxes, which amount to 8.25 percent in Dallas, on purchases of school supplies, shoes and clothing.
The Texas Comptroller’s Office estimates that Texans (and a few people from Louisiana, which isn’t having a sales-tax weekend this year) will save $90.3 million, which comes out to about $1 billion worth of pencils and paper, backpacks and shoes, and tops and bottoms.
Everyone is included in this state-sponsored promotion; no need to have children in your responsibilities to qualify. Items priced under $100 qualify. To be sure which ones, check out the list of taxable and exempt items on the Comptroller’s website.
The concept of forgoing sales taxes for a few days sort of swept the nation back in the late 1990s and early 2000s as state legislators saw an easy bone to throw to parents, who always need a break. Over time, some states have stopped the controversial program only to restart it and then stop it again.
Some say these tens of millions of dollars could be helping teachers and classrooms. But so far, the Texas Legislature hasn’t been swayed to kill it.
More than 20 states have tried initiating tax-free shopping. Only 16 states have sales tax-free weekends tied to back-to-school shopping this year, including Oklahoma, which had one last weekend.
But Louisiana, which changed its sales tax law on July 1, has suspended all sales tax holidays through June 30, 2025, and lowered the state portion of the sales tax from 5 percent to 4.45 percent. That lowered its overall rate enough that and now it is no longer the state with the highest sales tax. Tennessee holds that position this year, according to data compiled by the Tax Foundation.
So there may be a few people driving across the border from Louisiana to go shopping in Texas this weekend.
A few tips
It’s worth a look: Here’s one way to think about what is and isn’t taxable on the Comptroller’s list. For example, golf jackets are exempt, but not golf gloves, because a golf jacket may be your only jacket for winter. However, while those golf gloves may provide some warmth, they remain taxable. I have never seen a golf purse, but just in case it’s on your list, know it’s taxed as are all purses and handbags. Same idea with shoes with cleats for all sports. Cleats aren’t on street shoes.
Online shopping: As more people shop online, tax-free weekend needed some online rules. The Comptroller’s office addresses it this way: Items must still be priced under $100, but online shoppers have to consider shipping as part of the item’s total sales price. Here’s the example the state gives: “You buy a pair of jeans for $95 with a $10 delivery charge for a total price of $105. Because the jeans’ total price is not less than $100, tax is due on the entire $105 price.” If there’s a flat fee shipping charge for multiple items in an order, the shipping charge will be applied to sales price of one item.
Know before you go: About 40 percent of back-to-school customers will use coupon offers, said University of North Texas retailing expert Linda Mihalick. About 90 percent of back-to-school shopping will be done in stores. “Easily comparable items such as laptops, computer accessories and dorm room basics are more logical online purchases than children’s apparel and shoes,” she said.
You know it’s true: Your kids don’t like trying on clothes. For sure they don’t want to wait for a dressing room. You have a few days to get them into stores before the weekend to find out how much they’ve really grown over the summer. Then you can go shop the list on your own this weekend. Everyone is happier.