The sales tax holiday helps families buy school supplies.
Every year, beginning on the first Friday of August, the state of Tennessee exempts certain purchases from regular state and local sales taxes. The sales tax holiday lasts the entire weekend, ending Sunday night. The holiday was created in 2006 to facilitate back-to-school shopping, and includes any Internet purchases made during the period. All individuals who buy eligible items are exempt from sales tax during the weekend regardless of their intended use, as long as the items are not for trade or business use.
Computers
During the holiday, computers that cost $1,500 or less are exempt from sales tax. The Tennessee Department of Revenue defines a computer as a CPU and its related components such as a monitor, keyboard and mouse. Computer peripherals, such as monitors and keyboards, are not exempt from sales tax if they are purchased by themselves. Other computing items or devices, including printers, video game consoles and handheld computing devices or PDAs are not exempt. Software is also not exempt.
School and Art Supplies
According to the Tennessee Department of Revenue, items in this category are things "used by a student in a course of study." The buyer's intent is unimportant, however. Items in this category are exempt from sales tax during the holiday regardless of whether they are bought for personal use. Pens, pencils, notebooks, binders, crayons, artistic paints and brushes are examples of items included in this category. To be eligible, each item must cost $100 or less, but there is no maximum limit on the number of items a shopper can buy. Thus, even though a shopper buys 10 items costing $100 each, that shopper pays no sales tax for the entire $1,000 purchase.
Clothes
All items of clothing priced at $100 or less are exempt from sales tax during the holiday as well. As with school supplies, there is no limit on the number of exempt items a shopper can buy. Items of normal daily wear, such as shoes, shirts, pants, dresses, skirts and coats are exempt. Hats, ties, gloves and belts are also exempt. Other accessories, such as handbags, umbrellas, briefcases and jewelry are not included in this category for sales tax holiday purposes. Sales tax must also be paid on sports equipment, such as cleats or football pads.
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