Dateline: August 4, 2005

Texas to give shoppers break on sales taxes

By Roger Estlack, Clarendon Enterprise

Texas shoppers get a break from state and local sales taxes this weekend – August 5, 6, and 7 – during the state’s seventh annual tax holiday.

Lay-away plans can be used again this year to take advantage of the sales tax holiday.

The law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.

The tax holiday occurs every year on the first Friday, Saturday, and Sunday of August. Qualifying items are exempt from state sales taxes, but exemption from local sales tax is up to individual cities. This year, since no cities opted out of the holiday, qualifying items will be fully exempt from tax throughout Texas.

Most clothing and footwear priced at less than $100 will be exempt from sales tax. Customers will receive the break on individual items, regardless of the total amount they buy. For example, sales tax is not due if a customer buys six shirts each priced at $99.99. But full tax is due on a shirt sold for $100; the first $99.99 cannot be exempted.

Clothing and footwear used primarily for athletic activities or for protective wear are not eligible for the exemption. Customers buying golf cleats or football pads, for instance, must pay sales tax. Athletic wear that is also used for participation in other non-athletic activities can qualify for tax exemption. For example, tennis shoes, baseball caps, and jogging suits are worn during everyday activities and thus may be purchased tax-free during the holiday.

Also excluded from the tax holiday are accessories such as jewelry and watches; items that are carried rather than worn, including handbags, briefcases and wallets; clothing rentals, such as formal wear and costumes; and repairs and alterations.