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Sales tax free week at the Connecticut Post Mall, in Milford, Conn. Aug. 19, 2024.<\/p>\n
Connecticut Post\/hearst Newspapers | Hearst Newspapers | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Every year, a handful of states offer shoppers a temporary tax break<\/a> to encourage spending.\u00a0This year, some of those “sales tax holidays<\/a>” are happening as President Donald Trump’s<\/a> tariffs threaten to hike prices.<\/p>\n These holidays waive state sales tax (and sometimes local levies) on certain purchases for a set period. While eligible items vary by state, many include categories like back-to-school shopping<\/a> or supplies for disaster preparedness.<\/p>\n “Sales tax holidays are politically popular because everyone likes tax relief,” said Katherine Loughead, a senior policy analyst and research manager with the Center for State Tax Policy at the Tax Foundation, where she has researched the topic<\/a>.<\/p>\n But “it’s not as good a deal” as policymakers and consumers expect, she said.<\/p>\n More from Personal Finance:<\/strong> While sales tax holiday supporters claim the policy boosts economic growth<\/a>, some research suggests<\/a> that consumers simply shift the timing of their essential purchases, Loughead said.<\/p>\n “Wealthier taxpayers are often best positioned to benefit from a temporary exemption” because they have the flexibility to choose when to make purchases, Miles Trinidad, a state analyst for the Institute on Taxation and Economic Policy, wrote in a July blog post<\/a>.<\/p>\n However, some middle- to lower-income families do plan for yearly sales tax holidays, particularly for bigger purchases like back-to-school shopping, experts say.<\/p>\n<\/div>\n Shelly Werger, 49, with her family in Iowa.<\/p>\n Courtesy: Shelly Werger<\/p>\n<\/div>\n<\/div>\n<\/div>\n Shelly Werger, a mother of seven in Guttenberg,\u00a0Iowa, says she tracked the timing of her state’s Aug. 1-2 sales tax holiday. “Everything is just getting so expensive right now that I am doing everything I can to save money here and there,” she said.<\/p>\n However, in Iowa, the exemption only covers clothing and footwear under $100<\/a> and not school supplies, computers or sports equipment \u2014 “we get a little bit of savings but not a lot,” Werger said.<\/p>\n<\/div>\n “A lot of states are offering sales tax holidays again this year,” Loughead said. “Some of them have gotten more generous, while others have been trimmed back.”<\/p>\n For 2025, 19 states have held or will hold sales tax holidays<\/a>, which matches the number from 2024, according to the Tax Foundation, as of July 22.\u00a0<\/p>\n Here’s a breakdown of the dates for 2025, eligible items and price limits.<\/p>\n<\/div>\n Any money-saving opportunity, particularly ahead of the peak back-to-school shopping season<\/a>, can be a benefit for families squeezed by higher costs.<\/p>\n A\u00a0survey\u00a0conducted last year by ParentsTogether<\/a>, a national parenting organization, found that 75% of parents said back-to-school shopping causes significant stress, and 47% reported cutting back on food to afford school supplies.<\/p>\n More recently, a report from Intuit Credit Karma<\/a>\u00a0found that 39% of parents said they were unable to afford back-to-school shopping this year, up from 34% in 2024<\/a>.\u00a0Many of them started shopping earlier than usual to prepare for tariff-related price hikes and to take advantage of sales tax holidays along with other summer sales, the report found.\u00a0<\/p>\n<\/div>\n “Families are kicking off their back-to-school shopping earlier this year and are keeping an eye out for key ways to save, including retailer sales and deals as well as events like tax-free holidays,” said Katherine Cullen, the National Retail Federation’s vice president of industry and consumer insights.<\/p>\n While skipping the state tax could save up to 7% in some places, “the even bigger impact is when you combine that discount with other savings strategies,” advised Ted Rossman, Bankrate’s senior industry analyst.<\/p>\n For example, “you can combine that with a store promotion \u2014 maybe they give 30% off. You could use a rewards credit card for 5% cash back. And let’s say you use an online shopping portal… for another 10% cash back,” Rossman said. “Something that would have cost you $100 (inclusive of sales tax) now might cost about half that.”<\/p>\n<\/div>\n<\/div>\n\n
Trump tariffs make investing ‘tricky,’ expert says<\/a>
What private assets in 401(k) plans mean for investors<\/a>
Ed Department launches college financial aid form sooner than expected<\/a><\/p>\nWhich states have sales tax holidays for 2025<\/h2>\n
A money-saving tool for shoppers<\/h2>\n
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