State residents to get yearly back-to-school purchasing ‘tax holiday’
The state’s annual Sales Tax Holiday will take place during a 48-hour time period beginning 12:01 a.m. Friday, July 25, and ending at midnight Saturday, July 26.
The popular “back to school” event is worth seven percent in savings to consumers as result of waiving the sales tax on specific items. It was established and set for this time of year specifically to help families with those purchases needed for a new school year. While seven percent may not seem like much on a single item, it can add up for fall and winter clothing for a larger family
The items exempt from sales tax during the Sales Tax Holiday period are identical to those items exempted the prior years, but some things one might think qualify, don’t, and others do.
Clothing and footwear items, meant to be worn next to the body and costing less than $100 per item, are exempt from sales tax during this period. School supplies and computers are not exempt, however.
The state law that effects the holiday says clothing “is any article of apparel designed to be worn on the human body including pants, shirts and blouses, dresses, coats, jackets, belts, hats, undergarments, and multiple piece garments sold as a set.”
Footwear “is any article of apparel for human feet except for skis, swim fins, roller blades, skates, and any similar items.” Cleats and items worn in conjunction with an athletic or recreational activity are other sample items not eligible, even if they are for school activities.
Accessories including jewelry, handbags, luggage, umbrellas, wallets, watches, backpacks, briefcases, and similar items do not qualify for the Sales Tax Holiday.
Articles that are normally sold together, such as a pair of shoes or a uniform, must continue to be sold as a set or a single unit. Components of the unit cannot be priced separately and sold as individual items in order to qualify for the holiday. However, if components of a unit are normally priced as separate items, then they may continue to be sold as separate items and qualify if the price of the article is less than $100.
The total price of items advertised as “buy one, get one free” or “at a reduced price” cannot be averaged to qualify both items for the holiday. The amount of sales tax due depends on the actual price paid for each item sold. For example, if a retailer advertises a pair of pants as “buy one, get one half off” with the first pair of pants priced at $120 and the second pair half off, then sales tax is due on the first pair priced at $120, though the second pair ($60) would not be subject to sales tax. However, the retailer may advertise and sell each pair of pants at 50 percent off, selling each pair of $120 pants for $60, thus making each pair sold eligible for the holiday.
Retailers may offer store discounts and store coupons to reduce the price of an eligible item to less than $100 in order to qualify for the holiday. However, manufacturer’s coupons do not reduce the sales price of an item; as a result, a manufacturer’s coupon cannot be used to reduce the selling price of an item to less than $100 in order to qualify for the holiday.
Items purchased during the Sales Tax Holiday and returned after the holiday for credit on the purchase of a different item, sales tax is applied to the sale of the newly purchased item. For example, a customer purchases a $35 shirt during the Sales Tax Holiday. After the holiday, the customer returns the shirt, receives a credit for the shirt, and then buys a $35 jacket. Sales tax is due on the $35 price of the jacket since the jacket was not purchased during the holiday. If an eligible item was purchased during the Sales Tax Holiday and later exchanged for the same item but it’s a different size, different color, etc., then sales tax is not to be charged even if the exchange is made after the holiday.
A detailed list of items that are eligible and not eligible is available from the State Tax Commission, www.tax.ms.gov.
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