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AMES -- With back-to-school sales starting, plan to capture even more savings during Iowa's Annual Sales Tax Holiday, Aug. 7-8. With some careful planning, this opportunity provides a helpful, targeted financial break for families.
During the first Friday and Saturday of August, households can expand student wardrobes without paying state and local sales tax. This means consumers will save at least $6 on every $100 they spend on clothing and shoes.
Iowa’s annual sales tax holiday kicks off at 12:01 a.m. on the first Friday in August and runs through midnight Saturday. Sunday purchases are fully taxed. Since the two-day event falls during the back-to-school shopping season, the exemption applies only to certain apparel and footwear priced less than $100. For a full list of items eligible during this tax-free event go to the Iowa Department of Revenue’s website. Exemptions do not apply to the prices of an item selling for more than $100.
State sales tax of 6% and any local option sales tax are waived on eligible items. Many municipalities have a separate 1% sales tax for the city and school district, which is also waived. During the sales tax holiday, a shopper could save between 6%-7% depending on the location.
The tax-exempt savings applies only to:
Clothing under $100
Shoes under $100
Examples of items that are still taxable during Iowa’s tax free weekend include: Jewelry; Watches and watchbands; Umbrellas; Sports equipment (such as skis, swim fins, rollerblades and skates, as well as clothing or footwear designed specifically for athletic use).
Back-to-school shopping can be a great beginning to an exciting new school year for students. With good planning, families can purchase what they need without breaking the bank. To take full advantage of Iowa's sales tax holiday by: Planning ahead; Setting a budget and sticking to it; Comparing prices and Knowing the rules and expecting a busy shopping weekend.
Stores have been stocking back-to-school items for nearly a month, but this tax-exempt weekend will be the busiest.
For more information and a complete list of what is included in the tax holiday, visit the Iowa Department of Revenue's website.