What Is a Sales Tax Holiday? How to Actually Benefit from Tax-Free Shopping

A sales tax holiday is a government-designated window when state sales tax is suspended on eligible items. About 19 states run them in 2025, covering clothing, school supplies, electronics, and emergency preparedness gear.

Here’s something that surprises most shoppers: 19 states suspended their own sales tax in 2025, costing themselves a combined $1.3 billion in revenue, according to Bloomberg Tax, 2025. That’s not a loophole. It’s the government deliberately handing you a discount.

So what’s actually going on here?

A sales tax holiday is a short window when a state lifts sales tax on specific categories of goods, usually a weekend, sometimes a full week or month. Think clothing, school supplies, computers, and emergency preparedness items. During the holiday, you pay the sticker price. No state tax on top. For a state that normally charges 6-8%, that saves real money on bigger purchases.

Our team regularly tests the deals and strategies mentioned here. We monitor coupon and discount opportunities across 20,000+ stores on our platform.

How a Sales Tax Holiday Actually Works

The mechanics are simpler than you’d think. A state passes legislation for a tax holiday, sets the eligible product categories and price thresholds, then publishes the dates. That’s it.

A few key points that actually matter:

Retailers don’t have a choice. If a business is registered to collect sales tax in that state, it’s required to participate in the holiday. That means every qualifying retailer, from a small boutique to a national chain, stops collecting state sales tax on eligible items during that window. No opting out.

Online stores are included, too. This trips up a lot of shoppers who assume tax holidays are an in-store-only deal. Most states require online retailers with a presence in the state to honor the holiday for purchases shipped to customers there. So if you order school supplies online from a Florida-based retailer during Florida’s August holiday? No state tax.

Local taxes may still apply. Here’s the thing most listicles skip: state sales tax holidays only waive the state portion of your tax. County and city taxes can still apply depending on the state. In some states, the local tax is waived too; in others, it isn’t. It’s worth checking your specific state’s Department of Revenue before assuming you’re getting a 0% tax rate.

Price thresholds change everything. Most states set a cap per item, not per transaction. Florida’s back-to-school holiday (typically the whole month of August) covers clothing and shoes under $100 per item, school supplies under $50 per item, and computers and accessories under $1,500. Buy a $95 pair of sneakers? Tax-free. Buy a $110 pair? The whole $110 is taxable, not just the $10 over the cap.

What Qualifies and What Doesn’t

Eligible items vary by holiday type and state. Here’s a rough breakdown of what usually qualifies for the most common holiday types.

Back-to-School Holidays

This is the big one. Most states covering clothing and footwear cap items at around $100 per piece. Cheap school supplies are typically capped lower in most tax holiday rules, around $30 to $50 per item. Some states extend this to computers and tablets, often up to $1,500 or even $2,000.

Generally NOT covered: sports equipment (unless it doubles as gym clothing), furniture, accessories like jewelry, or any item over the price threshold.

Emergency Preparedness Holidays

Generators, batteries, tarps, safety equipment, portable coolers, weather radios. These holidays tend to pop up in the spring in hurricane-prone states like Florida, Louisiana, and Alabama, timed before storm season starts. They’re practical and underused. A backup generator that costs $600 saves you $36-$48 in tax at a 6-8% rate.

Energy-Efficient Appliance Holidays

ENERGY STAR refrigerators, dishwashers, washing machines, heat pumps. The savings here can stack on top of federal tax credits in some cases, which makes them legitimately worth planning around. Some states also include solar panels and water-saving fixtures.

Second Amendment / Hunting Holidays

Several states (Mississippi, Louisiana, and West Virginia among them) run late-summer or fall holidays covering firearms, hunting gear, and related equipment. These tend to be more niche but generate significant sales for sporting goods stores.

What most guides miss is that “eligible items” lists can be surprisingly specific. In Virginia, for example, Energy Star products include specific appliance categories but exclude appliances above a certain wattage. Always verify against the official state tax authority list, not a third-party roundup.

Which States Run Sales Tax Holidays

As of 2025, about 19 states offered some form of sales tax holiday, according to Tax Foundation data, 2025. That number has been pretty consistent over the last few years.

States that regularly hold back-to-school or general tax holidays include Alabama, Arkansas, Connecticut, Florida, Georgia, Iowa, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Five states have no state sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon. Every day is effectively a tax holiday if you shop there, though local taxes might still apply in some cities.

Some states, including New Jersey, have suspended or ended their tax holidays in recent years. Things can shift year to year. Before you base a big purchase on a tax holiday, look up the current year’s schedule from your state’s official tax authority or a source like taxadmin.org.

The Back-to-School Tax Holiday: Where the Real Volume Happens

Back-to-school is by far the highest-traffic tax holiday period. Most states run their events in late July or early August. That’s when families spend the most on clothing, supplies, and electronics for school. If you’re building a list before the holiday hits, our back-to-school sales roundup tracks deals as they go live.

Florida runs the longest back-to-school window, often covering the entire month of August. Texas typically holds a three-day weekend in early August. Massachusetts usually holds a two-day weekend in August covering most tangible goods under $2,500 per item.

The spending data backs this up. Retail spending in Massachusetts rose roughly 40% over tax holiday weekends compared to neighboring states, according to Federal Reserve Board research, 2017. And it’s not just extra spending: households bought 49% more clothing items and 45% more shoes during tax holiday days compared to non-holiday periods, according to a 2013 study on consumption responses to temporary tax incentives.

That’s a real behavioral shift. People are deliberately timing their purchases to catch that holiday window. If you’re buying back-to-school supplies anyway, there’s no reason not to do the same.

Do Online Purchases Count?

Yes, in most states. Online purchases shipped to a qualifying address within the state are treated the same as in-store purchases for most modern tax holiday rules. This is a bigger deal than it sounds because it means you can stack the tax savings with online-only coupon codes that don’t exist in physical stores.

We’ve tracked plenty of situations where retailers run additional promos specifically timed to their tax holiday windows. And the two can combine. A 15% off coupon code plus no sales tax on a $200 electronics order adds up to a much bigger saving than either one alone.

A few caveats: marketplace transactions (like buying from a third-party seller on Amazon) may not qualify if the seller isn’t registered in your state. Check the seller’s location before assuming your purchase is covered.

What the Research Says About Actual Savings

The shopping spikes are real. The question is, how much of that savings actually reaches the consumer versus getting absorbed by the retailer?

A study on consumer incidence in sales tax holidays found that consumers captured about 80% of the tax cut during Florida’s 2001 holiday. Retailers absorbed about 20% of it by not discounting as much or slightly adjusting their pre-tax prices. That’s still a solid 80% pass-through to the shopper, but it means the headline “you save the full tax rate” isn’t always the complete picture.

For the states, the hit to revenue is significant. A Chicago Federal Reserve working paper, 2010, found about a 4% reduction in sales and use tax collections in months with a tax holiday. At scale, that adds up fast.

So what does that mean for you? The average back-to-school spend is about $800 per household, based on retail industry estimates. At a 7% tax rate, that’s $56 in tax normally. During a holiday, that $56 stays in your pocket. Not life-changing, but multiply it by two or three kids and it adds up.

How to Maximize Your Savings During a Tax Holiday

Getting the most out of a tax holiday just takes a little prep. Here’s what works.

Stack with coupon codes. Sales tax holidays are one of the few times that timing an online order with an active coupon code creates compounded savings. We’ve seen Kohl’s coupon codes and store sales overlap with tax holiday dates, which makes the effective discount significantly higher than either one alone. Check current codes before you buy.

Focus on items near the price threshold. The per-item caps mean the biggest savings come from items just under the limit. A $98 pair of shoes saves you roughly $7 in tax at 7%. A $149 pair saves you nothing because it’s fully taxable. It pays to know these caps cold before you shop.

Don’t forget big-ticket items. Emergency preparedness and appliance holidays are often overlooked because they’re not back-to-school. But a $600 generator or a $900 ENERGY STAR washing machine saves $42-$72 in tax at typical rates. That’s meaningful. It’s worth planning big appliance purchases around these events.

Check online stores, not just physical ones. Retailers like Target and Best Buy participate in tax holidays for their online stores. You can shop from home, apply a coupon code at checkout, and avoid sales tax, all at once.

Verify the official list. Third-party sources get the eligible items list wrong sometimes, especially for niche categories like school supplies vs. art supplies (which often get different treatment). Go to your state’s Department of Revenue or comptroller website to confirm.

Looking at past deal patterns we’ve tracked, the best overlap between tax holidays and retailer promotions tends to happen in the first week of August. Retailers know shoppers are primed to buy and often run their own promotions at the same time.

FAQ

What is a sales tax holiday?

A sales tax holiday is a short period, usually a weekend or a few days, when a state temporarily suspends its sales tax on certain items. During this time, you can buy eligible goods without paying the state portion of sales tax, which typically ranges from 4% to 10%.

Which states have sales tax holidays in 2025?

About 19 states held sales tax holidays in 2025, including Alabama, Arkansas, Connecticut, Florida, Georgia, Iowa, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. Specific dates and eligible items vary by state. Check taxadmin.org or your state’s revenue department for confirmed 2025 dates.

Do online purchases qualify for sales tax holidays?

In most states, yes. If you buy qualifying items online from a retailer with a presence in your state and the order ships to your state address, it’s usually eligible for the tax break. Some marketplace sellers, meaning third-party sellers on platforms like Amazon, may not qualify if they’re not registered to collect tax in your state.

What happens if an item exceeds the price threshold?

Most states make the entire item taxable if its price exceeds the threshold, not just the amount over the cap. For example, if your state exempts clothing under $100 per item, a $105 shirt is taxable in full at the standard rate. A $99 shirt gets the full exemption. It’s worth paying attention to individual item prices, not just your cart total.

Can I use coupons during a sales tax holiday?

Yes. Coupon codes, store discounts, and sales tax holidays can all apply to the same purchase. For online orders, you can enter a coupon code at checkout and still benefit from the tax exemption. The tax is usually calculated on the price after all discounts are applied, so a coupon can also reduce the item’s base price.

Do local taxes still apply during a sales tax holiday?

It depends on the state. Some states suspend both state and local taxes during the holiday; others only waive the state portion. County and city taxes may still apply in some jurisdictions. Check your state’s official guidance for the specific holiday you’re planning around.

How long do sales tax holidays last?

Most last a weekend, typically Friday through Sunday. Some states run longer windows. Florida’s back-to-school holiday, for instance, often covers the entire month of August. Massachusetts usually runs a single weekend in mid-August. Exact durations are set each year by state legislation, so dates can shift slightly.

Sources

1. Bloomberg Tax: 18 states to lose $1.3 billion from sales tax holidays in 2025 (2025)
2. Federal Reserve Board research: Effect of sales-tax holidays on consumer spending, Massachusetts 40% spending spike data (2017)
3. Consumption Responses to Temporary Tax Incentives, SSRN: Study finding 49% more clothing items and 45% more shoes purchased on holiday days (2013)
4. Consumer Incidence in Sales Tax Holidays, SSRN: Research on how much of the tax cut reaches consumers vs. retailers (2017)
5. Chicago Federal Reserve Working Paper: Analysis finding 4% reduction in state sales tax collections during holiday months (2010)
6. Tax Foundation Sales Tax Holidays Data: State-by-state list of sales tax holidays and participation rates (2025)

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