Spending

Don't make these 3 mistakes during summer sales tax holidays

"If there is anything your child needs for the upcoming school year ... it's a great time to stock up."

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Before back-to-school shopping season starts, there's another summer tradition that shoppers watch for: state sales tax holidays. This means that state sales tax will be withheld from certain purchases during a few days, usually a weekend.

Each state hosts their tax holiday at different times. For example, from July 30 to August 1, Tennessee is having its back-to-school sales tax holiday. On August 7 and 8, Arkansas hosts its tax-free weekend. Florida's tax holiday is a whopping 10 days long, starting July 31 and ending August 9.

Not everything will be tax-free, though, says consumers savings expert Andrea Woroch. "Most tax-free sales weekends are limited to certain merchandise, which includes school supplies and clothing," she says. "If there is anything your child needs for the upcoming school year in these categories, it's a great time to stock up."

Some states do loop in big-ticket items. Florida's tax holiday, for example, includes computers, and Mississippi's includes firearms.

However, just because you're not paying sales taxes on items doesn't mean it's smart to spend in a way you end up regretting. Here are three mistakes to avoid during your state's tax holiday.

Don't forget to use coupons

"Stack coupons on sales during tax-free holidays," Woroch says. For example, Office Depot has a sitewide 25% off discount right now. That, combined with a tax exemption, could add up quick.

For example, a JanSport backpack at Office Depot is $48. If you stack the 25% off discount with the tax exemption, you'd pay $36. Assuming a 7% tax rate, buying during the sales tax holiday saves you an extra $2.52, compared to just using the coupon.

Don't spend more than the purchase limit

Purchases are only tax exempt up to a certain dollar amount. For example, if you decide to buy a computer during Florida's tax holiday, taxes will only be waived on the first $1,000 of the sales price. So if you buy a $1,500 computer, you'll still have to pay taxes on $500 of it.

If you're using a coupon that would bring your purchase below the purchase maximum, check the state guidelines first, says Kristin McGrath, savings expert and editor for RetailMeNot and Offers.com. "Some states determine the threshold before coupons are applied, and some states use the after-coupon amount," she says. "Shoppers will need to do their homework and carefully monitor what they're putting in their carts."

Shoppers will need to do their homework and carefully monitor what they're putting in their carts.
Kristin McGrath
savings expert and editor for RetailMeNot and Offers.com

Don't impulse shop

Don't use your state's tax holiday as an excuse to buy things you don't need, experts agree. Take inventory of what you have in your house before heading out the door, make a list of what you need, and stick to it while shopping.

"At the end of the day, sales tax is a small percentage off — less than 10% in most states," McGrath says. "So be sure you're not impulse shopping."

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