Sales tax holidays are a strategy used by states to incentivize back-to-school shopping while also giving consumers a break from some added charges. Some nearby states hold annual sales tax holidays leading up to the new school year, but consumers in Georgia need to travel to take advantage of such offers.
Alabama, Florida, South Carolina and Tennessee hosted sales tax-free shopping days over the past few weekends, but the Georgia state legislature has not adopted similar legislation for local consumers. North Carolina is the only other neighboring state without a sales tax-free weekend.
Which purchases qualify?
Sales tax-free holidays don’t exempt all products from additional taxing. Each state legislature designs the holidays in their own way, but most choose clothing and footwear below $100, computers less than $1,000 and other supplies under $20 as exemptions to state sales tax.
Proponents of tax-free shopping holidays claim the exemptions get consumers into retail stores where they will also make purchases that qualify for taxing. Some shoppers may choose to only purchase exempt items, but many will use the holidays to accomplish all back-to-school shopping, including items still subject to sales tax.
Why not in Georgia?
Georgia last held a tax-free weekend in 2012 and North Carolina ended its annual run of tax-free weekends in 2013 after 11 years of the program.
Each state can choose whether or not to host tax-free weekends and they have generally decreased in popularity in recent years. Only 16 states held sales tax holidays at any point in 2017. The highest number of states to hold tax-free weekends in recent years was 19 in 2010.
For the most part, state officials and offices don’t want to lose out on potential taxed revenue by allowing large numbers of consumers to make tax-free purchases. States rely on sales and other taxes to fill out the budget and the potential increase in sales of non-exempt items may not make up for the dip in revenue.
State tax laws and policies can vary year by year depending on the priorities of state and local government. Stay up-to-date with Georgia taxes and know how new or existing policies may affect your financial situation.