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Taxes take a holiday
Nine states to offer some form of tax amnesty through the end of the back-to-school season.
August 4, 2005: 7:05 AM EDT
By David Ellis, CNN/Money staff writer

NEW YORK (CNN/Money) - While many students shudder at the onset of the back-to-school season, parents have reason to smile, as it signals the start of the tax holidays.

In the coming weeks, nine states and the District of Columbia will offer periods of sales tax exemptions, according to CCH Tax & Accounting. Two other states, Florida and Georgia, offered exemption periods that have already ended.

Those few days of tax freedom mean consumers can save a few bucks on everything from clothing and footwear to school supplies and computers.

"It has a lot of appeal," said Daniel Schibley, the state tax news director for CCH. "Retailers like it because they think it will bring more people into the stores; politicians like it because they are giving a tax cut; and parents think it's a great thing that they're saving money."

Maryland and Tennessee, not participating this year, are planning tax holidays in 2006, while Michigan is considering its own version.

Vermont and West Virginia are not granting any breaks this year after offering programs last year.

The tax-amnesty trend, which New York initiated in 1997, does not always delivere results for retailers.

This year the National Retail Federation anticipates that sales in the back-to-school shopping period, which typically covers all of August, will fall by 8 percent from the same period in 2004.

Listed below are the different states offering tax holidays, the dates of the tax break and what items qualify.

Connecticut

Dates: August 21-27

Items covered: Shoes and clothes that sell for $300 or less. The tax break does not apply to athletic or protective clothing and footwear, jewelry, handbags, luggage, umbrellas, wallets and watches.

District of Columbia

Dates: August 6-14

Items covered: School supplies, clothing, accessories and shoes with a price of $100 or less are covered.

Iowa

Dates: August 5-6

Items covered: During the holiday, no sales tax, including school and local option sales taxes, will be collected on clothing or footwear that sells for $100 or less per item. Certain accessories are excluded.

Massachusetts

Dates: August 13-14

Items covered: All nonbusiness sales on a single item costing $2,500 or less are covered. Automobiles, boats, telecommunication items, meals, utilities and tobacco are not covered.

Missouri

Dates: August 5-7

Items covered: Clothing and footwear except for certain accessories that are priced at $100 or less, school supplies costing $50 or less, computer software with a taxable value of $350 or less, and personal computers and computer peripherals that retail for $3,500 or less. The holiday does not apply to sales within the state fairgrounds.

New Mexico

Dates: August 5-7

Items covered: Customers may buy the following items free of tax from August 5-7: clothing or shoes sold for less than $100 (excluding items primarily for athletic or protective use); computers (but not handheld computers) sold for no more than $1,000, and any associated monitor, speakers, printer or related items sold for no more than $500; notebooks, paper, writing instruments, crayons, art supplies, paper clips, staples, staplers, scissors and rulers priced under $15; and bookbags, backpacks, handheld calculators, maps and globes priced under $100.

New York

Dates: August 30-September 5

Items covered: Clothing and footwear, as well as items that are used to make or repair clothing, that cost under $110 per item are exempt from state and certain local taxes.

North Carolina

Dates: August 5-7

Items covered: Clothing, footwear and school supplies are exempt from taxes with a price tag of $100 or less, sports and recreation equipment that costs under $50, and computers for $3,500 or less. Accessories, jewelry, cosmetics, protective equipment, wallets, furniture, items used in a trade or business, and rentals are not covered.

South Carolina

Dates: August 5-7

Items covered: Clothing, accessories, footwear, school supplies, computers, printers, printer supplies, computer software and linens for the bed and bath are exempt. Jewelry, cosmetics and furniture, are not.

Texas

Dates: August 5-7

Items covered: Most clothing and footwear priced at less than $100 are exempt from state and local sales taxes. Athletic clothing and footwear are ineligible for the exemption. Accessories, such as watches and jewelry, also are excluded from the holiday.

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How are retailers gearing up for their customers that are heading back-to-school? Click here.  Top of page

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