By: Lindsay Sisk, Gable Tax Group
Sales tax holidays are these wonderful time periods throughout the year that various jurisdictions allow a break in collecting sales tax on specific items. The goal is to increase revenue for the vendors while giving a break to consumers.
Currently there are approximately 15 states that issue sales tax holidays. For example, at the end of May Texas has declared May 27-29 a sales tax holiday on purchases of Energy Star-qualified air conditioners priced for $6,000 or less. With the summer heat on its way, this is a great advantage for consumers to save around 8%, while retailers are able to give an instant discount.
Most commonly are sales tax holidays at the end of summer targeted towards back to school shopping. Clothing and school supplies are available for purchase sales tax free.
The concept is great, it benefits both the seller and the buyer in terms of revenue and receiving a discount that does not come out of the seller’s bottom line. However, from a sales tax compliance prospective, it can be very challenging.
For instance, if you are a large retailer, how do you keep track? With having multiple locations throughout the country, it can be very time consuming keeping track of the various rules. Secondly, how do you notify the staff to ensure you are compliant with the ruling. And lastly, how do you update your tax decision software to mark the items as nontaxable for the specific range of time?
If you’re a small business, do you have the sales tax knowledge to administer holiday?
Let us help you! It’s what we do best. Call us for a Free Consultation at 888.872.6579 or email us at Info@Gable.Tax.
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