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The Comptroller encourages all taxpayers to support Texas businesses while saving money on tax-free purchases of most clothing, footwear, school supplies and backpacks (sold for less than $100) during the annual Tax-Free weekend. Qualifying items can be purchased tax free from a Texas store or from an online or catalog seller doing business in Texas. In most cases, you do not need to give the seller an exemption certificate to buy qualifying items tax free.
This year’s sales tax holiday begins Friday, Aug. 9, and goes through midnight Sunday, Aug. 11.
The sales tax exemption applies only to qualifying items you buy during the sales tax holiday. Items you buy before or after the sales tax holiday do not qualify for exemption, and there is no tax refund available.
Qualifying Items
Clothing and Footwear
Qualifying Items
During the sales tax holiday, you can buy most footwear and clothing (sold for less than $100) tax free. You do not need to give the seller an exemption certificate.
The exemption applies to each eligible item sold for less than $100, and there is no limit to the number of qualifying items you can buy.
For example, if you buy two shirts for $80 each, each shirt qualifies for the exemption because each is less than $100, even though the total purchase price is $160.
Items That Do Not Qualify
The following items do not qualify for exemption during the sales tax holiday:
- items sold for $100 or more
- clothing subscription boxes
- specially-designed athletic activity or protective-use clothing or footwear
- For example, golf cleats and football pads are usually worn only when people play golf or football, so they do not qualify for the exemption.
- Tennis shoes, jogging suits and swimsuits, however, can be worn for other than athletic activity and qualify for the exemption.
- clothing or footwear rentals, alterations (including embroidery) and cleaning services
- items used to make or repair clothing, such as fabric, thread, yarn, buttons, snaps, hooks and zippers
- jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets, watches and other accessories
- computers
- software
- textbooks
- certain baggage items (see below)
- unspecified school supplies (see below)
Face Masks
Cloth and disposable fabric face masks meet the definition of an article of clothing and are exempt from sales tax during the upcoming Sales Tax Holiday.
The statute specifically excludes special clothing or footwear that is primarily designed for athletic activity or protective use and that is not normally worn except when used for the activity. Industrial or medical grade masks (e.g. N95 or other masks designed as personal protective equipment) or other similar personal protection equipment are not exempt during the sales tax holiday.
If a cloth or disposable fabric face mask is sold with a filter, the mask is exempt during the holiday; however, replacement filters are taxable.
For additional information about the upcoming sales tax holiday see Rule 3.365, Sales Tax Holiday – Clothing, Shoes and School Supplies.
Backpacks
During the sales tax holiday, student backpacks sold for less than $100 are exempt from tax.
The exemption includes backpacks with wheels and messenger bags. You can buy up to 10 backpacks tax free at one time without giving an exemption certificate to the seller.
Baggage Items That Do Not Qualify
The following items do not qualify for this exemption:
- framed backpacks
- luggage
- briefcases
- athletic, duffle or gym bags
- computer bags
- purses
School Supplies
Only specific school supplies sold for less than $100 qualify for the exemption, and an exemption certificate is not required.
Special Purchases
School Supplies Purchased Using a Business Account – Exemption Certificate Required
If you buy qualifying school supplies under a business account, you must give a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF), to the seller.
"Under a business account" means you are:
- using a business credit card or business check and not a personal credit card or personal check;
- being billed under a business account maintained by the seller; or
- using a business membership at a membership-based retailer.
Layaways
During the sales tax holiday, you can buy qualifying items tax free when you:
- make the final payment on an item already on layaway; or
- choose an item and place it on layaway
Special Orders and Rain Checks
During the sales tax holiday, you can buy qualifying items tax free, even if the items have to be ordered.
For example, if you pay for an $80 shirt that must be special-ordered or is on back order, and you pick up the shirt after the sales tax holiday, then it still qualifies for the exemption.
If you buy the qualifying item after the sales tax holiday, a special order made or rain check given during the sales tax holiday does not qualify the item for exemption.
For example, if you place a special order (or receive a rain check) to buy a $50 shirt and do not pay for the shirt during the sales tax holiday, then the shirt is taxable.
Online Purchases and Telephone Orders
During the holiday you can buy qualifying items in-store, online, by telephone, mail, custom order, or any other means. The sale of the item must take place during the specific period. The purchase date is easy to determine when the purchase is made in-store but becomes more complicated with remote purchases. The purchaser must have given the consideration for the item during the period even if the item may not be delivered until after the period is over.
For example, if a purchaser enters their credit card information in an online shopping website on Sunday Aug. 11, 2024 at 5:00 p.m.to purchase qualifying school supplies, but the school supplies will not be shipped until Friday Aug. 16, 2024 and will not arrive until Tuesday Aug. 20, the purchase will still qualify for the exemption. However, if the charge to your credit card is declined by the payment processor at 11:00 p.m. on Sunday Aug. 11, 2024 and the purchaser does not resubmit payment until Monday Aug. 12, the purchase is taxable.
Additional Charges Affect the Sales Price
Delivery, Shipping, Handling and Transportation Charges
Delivery, shipping, handling and transportation charges by the seller are part of the item’s sales price.
Since clothing, backpacks and school supplies have to be less than $100 to qualify, you have to look at the item’s total sales price to determine if you can buy it tax free.
For example, you buy a pair of jeans for $95 with a $10 delivery charge for a total price of $105. Because the jeans’ total price is more than $100, tax is due on the entire $105 price.
If a delivery charge is billed per item, and an invoice has both exempt and taxable items, only the qualifying exempt item’s delivery charge is exempt.
If the delivery charge is a flat rate per package, and the amount charged is the same regardless of how many items are included in the package, the total charge can be attributed to any one of the items in the package.
Sales Tax Holiday Refund Requests
If you pay sales tax on qualifying items during the sales tax holiday, you can ask the seller for a refund of the tax paid. The seller can either grant the refund or provide their customer with Form 00-985, Assignment to Right to Refund (PDF), which allows the purchaser to file the refund claim directly with the Comptroller’s office.
Sellers – What You Need to Know
Advertising for Non-Qualifying Items
If you sell items that do not qualify for the sales tax holiday exemption, you can advertise that you are paying the sales tax for your customers. The following conditions apply:
- You must indicate in an advertisement or statement that you are paying sales tax for your customer;
- You may not indicate or imply that the sale is exempt or excluded from tax; and
- Any purchaser's receipt or statement you provide to your customer must separately state the amount of sales tax and indicate the tax will be paid by the seller.
Reporting Tax
If you sold qualifying items tax free during the sales tax holiday, only include these tax-free sales in Total Texas Sales (Item 1) of your sales tax return. Do not include your tax-free sales in Taxable Sales (Item 2).
Be aware, if you sold qualifying exempt items and collected sales tax, then you must remit it to our office.
Reporting Exempt Sales – Example
During the sales tax holiday, your store sold a shirt for $50 and did not collect tax on the shirt. The shirt qualifies as a tax-free item, so tax is not due.
On your sales tax return, you must include the $50 in Total Texas Sales (Item 1).
Reporting Taxable and Exempt Sales – Example
During the sales tax holiday, you sold ten $20 shirts ($200) and ten $5 wallets ($50).
On your sales tax return, you must enter $250 in Total Texas Sales (Item 1), the amount of all sales made during your reporting period and enter the $50 for the wallets in the Taxable Sales column (Item 2) because the wallets are not exempt.
Reporting Tax Included Sales – Example
Your store advertises that 8.25 percent sales tax is included in the price of clothing over $100. Your store sold ten $50 ($500) shirts and ten $150 suits ($1,500, tax included).
Total Texas Sales (Item 1)
When computing sales tax on your return, “back out” the tax before computing the Total Texas Sales amount.
To do this, take the total amount of sales in which tax was included ($1,500) and divide that amount by one plus the tax rate ($1,500/1.0825 = $1,385.68).
The difference between the $1,500 and the $1,385.68 is the tax of $114.32 included in the charge to the customer.
You must include $1,385.68 in Total Texas Sales (Item 1) for the taxable suits and add this amount to the $500 for the tax-free shirts for a total of $1,885.68. Report this amount in Item 1.
Taxable Sales (Item 2)
Report $1,385.68 in Item 2. Send the $114.32 with your sales tax return.
Reporting Discounts – Examples
Your store offers an 8.25 percent discount on the price of all clothing.
A shirt, which regularly sells for $100, is now $91.75 (qualifying for the exemption) and no tax is due. You should include the $91.75 in Total Texas Sales (Item 1).
A shirt, which regularly sells for $200, is now $183.50 and is taxable. The customer pays $198.64 (sales price and tax). You must report $183.50 in Total Texas Sales (Item 1) and Taxable Sales (Item 2) and send the $15.14 in tax with your sales tax return.
98-490
(08/2023)