The holiday season of Thanksgiving, Christmas, and Hanukkah may be the most wonderful time of the year, but for shoppers and retailers, there’s another great time to celebrate: sales tax holidays.
These holidays don’t come with carols and decorations, but they can lead to major savings for customers and a sales boost for businesses. Here’s everything you need to know about sales tax holidays, including what states participate and what items are eligible for a sales tax-free weekend in 2024.
Sales tax holidays are typically weekends or weeks when select items are exempt from state sales taxes. The goal is to entice shoppers and reduce cross-border shopping, especially in areas where consumers could easily cross state lines for a lower — or sometimes non-existent — sales tax. Sales tax holidays typically only include state sales tax, meaning other local taxes aren't necessarily removed.
Modern sales tax holidays have been around since New York started the trend in 1997. However, not every state participates. Five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) don’t have state sales tax, making every day a sales tax holiday. Of the remaining 45 states, 19 currently hold annual Sales tax holidays at varying levels. That number will likely continue to drop, with Virginia’s holiday set to expire in July 2025.
Sales tax holidays usually apply to in-person and online sales during the included dates. With only a few exceptions, all retailers in the state must participate in the sales tax holiday, including local businesses and national chains with locations in the state. Essentially, if a business is registered to collect sales tax in a state, it must participate, both online and in person. Most sales tax holidays run from 12:01 a.m. on the first day through midnight on the last day, so retailers need to be prepared for early bird shoppers to log on as soon as the promotion starts to take advantage of their online shopping.
Participating in a sales tax holiday is easy for customers because it doesn’t require a coupon, special code, or membership. During the selected weekend, the sales tax is automatically removed from included purchases. A select few holidays only apply to certain shoppers who pay sales tax that is later refunded. Of course, a simple experience for shoppers often requires more work for retailers to program their point-of-sale machines correctly.
Most sales tax holidays center on certain types of items, such as the following:
Some states hold multiple sales tax holidays throughout the year to include various types of products, but most only have one weekend of sales tax-free shopping on certain items. States must enact legislation about the sales tax holiday, including how frequently it will occur.
Most shoppers view sales tax as a nuisance. In many areas, consumers will cross state lines to shop in areas with a local or no sales tax, meaning some retailers are missing out on potential customers and revenue. Sales tax holidays are designed to entice shoppers to stay local or even bring in shoppers from other areas. The goal is to boost sales for retailers and stimulate the local economy. For shoppers, the deal is often a no-brainer and an automatic discount on their shopping. Considering most state sales taxes range between 5-7%, that can be a noticeable savings for customers.
However, there is some debate about the effectiveness and sustainability of sales tax holidays. Sure, the government misses out on revenue it could bring in from sales tax that weekend, but those tax breaks could lead to long-term revenue and growth as they stimulate spending and act as a jolt to the local economy. Plus, consumers tend to come for tax-free shopping but end up purchasing other items that aren’t included in the holiday and paying sales tax on those items, which can also help tax revenue.
However, some people argue that the increased sales are a moot point as customers hold off on their shopping in the days and weeks leading up to the sales tax holiday to take advantage of the savings. If a customer plans to buy a generator or computer, they often wait until the tax-free weekend to spend the same money but save on taxes. Essentially, instead of spreading the spending out over a typical month, the spending was consolidated into a single weekend that only appeared to boost sales. But this isn’t always the case: one study found that a sales tax holiday in Massachusetts increases spending over the entire month.
There’s no definitive proof either way if sales tax holidays boost the economy, so many states continue to offer them annually, figuring that if shoppers are going to spend money on big-ticket items or during busy seasons like back-to-school, losing on sales tax is a small risk to take to bring in more customers. For businesses, sales tax holidays are typically a win and can lead to bigger crowds and the chance to bring in new customers who will hopefully return to shop even after the tax promotion is over.
Dozens of states will hold sales tax holidays in 2024 on various items. Before shopping, be sure to check the details of what items are included, as most states limit sales tax exemptions on items priced over a certain amount.
Retailers should also be aware of local dates and inclusions so they can plan accordingly, including scheduling more staff if necessary to match the influx in foot traffic.
| Location | Dates | Description |
| Alabama | February 23-25 | Severe weather preparation items that cost $60 or less, plus portable generators and power cords used to provide light or communicationsor preserve food in the event of a power outage that cost$1,000 or less. |
| July 19-21 | Clothing priced $100 or less per item, single purchases of computers and school supplies totaling $750 or less, books priced $30 or less. | |
| Alaska | None | Alaska doesn’t have a state-wide sales tax. |
| Arizona | None | |
| Arkansas | August 3-4 | Clothing items under $100, school supplies and electronics. |
| California | None | |
| Colorado | None | |
| Connecticut | August 18-24 | Clothing and footwear under $100. Specialty clothing and accessories, jewelry, and luggage are excluded. |
| Delaware | None | Delaware doesn’t have a state-wide sales tax. |
| Florida | January 1-14 | Clothing and footwear under $100, school supplies $50 or less, personal computers priced $1,500 or less. |
| Georgia | None | |
| Hawaii | None | |
| Idaho | None | |
| Illinois | None | |
| Indiana | None | |
| Iowa | August 2-3 | Clothing and footwear under $100 per item. |
| Kansas | None | |
| Kentucky | None | |
| Louisiana | September 6-8 | Firearms, ammunition, and hunting supplies. |
| Maine | None | |
| Maryland | February 17-19 | Any Energy Star product or solar water heater. |
| August 11-17 | Clothing and footwear under $100 per item. | |
| Massachusetts | TBD, but typically a weekend in mid-August. | |
| Michigan | None | |
| Minnesota | None | |
| Mississippi | July 26-27 | Clothing and footwear under $100 per item. |
| August 30-September 1 | Firearms, ammunition, and certain hunting supplies. | |
| Missouri | April 19-25 | Energy Star appliances priced $1,500 or less. |
| August 2-4 | Clothing valued at $100 or less per item, school supplies up to $50, personal computers up to $1,500. | |
| Montana | None | Montana doesn’t have a state-wide sales tax. |
| Nebraska | None | |
| Nevada | October 25-27 | Applies only to members of the National Guard and their families. |
| New Hampshire | None | New Hampshire doesn’t have a state-wide sales tax. |
| New Jersey | August 24-September 2 | School supplies under $1,000 per item and computers under $3,000 per item. |
| New Mexico | August 2-4 | Clothing and footwear under $100 per item, school supplies under $30, computers under $1,000.Note that retailers aren’t required to participate. |
| New York | None | |
| North Carolina | None | |
| North Dakota | None | |
| Ohio | August (Dates TBD) | Will likely include most items priced $500 or less. |
| Oklahoma | August 2-4 | Clothing or footwear under $100 per item. |
| Oregon | None | Oregon doesn’t have a state-wide sales tax. |
| Pennsylvania | None | |
| Rhode Island | None | |
| South Carolina | August 2-4 | Clothing and footwear, computers, school supplies, linens, and some home items. |
| South Dakota | None | |
| Tennessee | July 26-28 | Clothing and footwear under $100, school supplies under $100, computers under $1,500. |
| Texas | April 27-29 | Certain emergencypreparation items. |
| May 25-27 | Energy Star air conditioners up to $6,000, and other Energy Star appliances up to $2,000. | |
| August 9-11 | Clothing, footwear, and school supplies under $100 per item. | |
| Utah | None | |
| Vermont | None | |
| Virginia | August 2-4 | Clothing and footwear under $100 per item, school supplies under $20 per item, and hurricane preparedness items under $1,000. Energy Star and WaterSense appliances up to $2,500. |
| Washington | None | |
| West Virginia | August 2-5 | Clothing under $125, school supplies under $50, computers under $500, sports equipment under $150. |
| Wisconsin | None | |
| Wyoming | None |
If you want to learn more about sales tax holidays and how to prepare your business with a smooth sales tax process year-round, contact Peisner Johnson to get started with a customized sales tax system for your business needs.
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