Tax Free Weekend

Plan for Back-to-School Shopping During Iowa’s Tax-Free Weekend

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Consumers working through rising prices of children’s school supplies and inflation can find some relief by planning for Iowa’s sales tax-free weekend.

Mark your calendar for this once-a-year opportunity, August 2-3, 2024, to expand your student wardrobes without paying state and local sales tax. This means consumers will save at least $6 on every $100 they spend for clothing and shoes.

“With the average family spending $864 on back-to-school items, that’s almost as much as people spend for the winter holidays,” says Carol Ehlers, a human sciences specialist in family finance with ISU Extension and Outreach. “Many households set aside money year-round to help cover their holiday expenses and the same should be done for back-to-school purchases. This should not be a surprise and needs a spending plan.”

Iowa’s annual sales tax holiday kicks off at 12:01 a.m. Friday, August 4 and runs through midnight Saturday, August 5. Although 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. Waived on such items are the state sales tax of 6 percent and any local option sales tax. Many municipalities have a separate 1 percent sales taxes for the city and school district. This means that during the sales tax holiday, shoppers could save between 6-7 percent depending on their location, or approximately $7 on an item which is less than $100.

Examples of a few items that are exempt from Iowa’s tax-free weekend include: jewelry, watches and watchbands, umbrellas, and sports equipment (such as skis, swim fins, roller blades, and skates, as well as clothing or footwear designed specifically for athletic use).

Smart Shopping Tips for Iowa’s Tax-Free Weekend

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. Take full advantage of Iowa’s tax-free weekend by applying the following tips:

Plan Ahead.

Plan major clothing and shoe purchases ahead of Iowa’s state tax free weekend event understanding that the tax-free exemption only applies to purchasing clothing and shoes during that first weekend of August.

“Giving each student a chance to inventory what they can start school with and share their expectations, allows family members to better plan,” Ehlers said. “Everyone may not get exactly what they want but talking about it in advance will help set a positive tone.”

Ehlers also suggests discussing what your family can realistically afford. Parents should decide how much the family can set aside for school shopping. Consider using the tax-free holiday time to purchase not just what you need right now, but what your children will need over the next several months. She recommends avoiding the temptation to use credit cards unless you are able to pay them off in full each month.

Set A Budget and Stick to It.

Be careful not to overspend just because the tax-free weekend is occurring. According to the National Retail Federation, the average family with students in kindergarten through 12th grade spent $864 in 2022 on electronics, apparel, and other school items. Review what you spent last year for clothing and shoes to create your own spending plan.

“Let students make decisions within the amount of money they are allotted,” Ehlers said. “If they have more ‘wants’ than the family budget can afford, they may need to use some of their own money or earn money from odd jobs to make up the difference. Allowing students to be a part of these decisions gives them a chance to learn to manage money wisely.”

Compare Prices.

Use the sales circulars from your newspaper to compare prices on the items you wish to buy. Visit websites of several stores where you usually shop. If you tend to buy your kids’ jeans or sneakers at national retail outlets, visit their websites during tax free week to find out which store is offering the better deal. Some stores may be willing to match the price offered in a competitor’s advertisement. Be sure to keep your receipts in case you need to return something or until the warranty expires for more expensive items.

Know The Rules and Expect a Busy Shopping Weekend.

The Legislature approved the tax holiday in 2000 to help boost the economy and give consumers a break. Previous tax-free holidays have shown to pump up sales for everyone from big-box retailers to mom-and-pop shops. Some merchants report double-digit increases in sales, compared to a typical August weekend. Know the rules to make the most of your purchase decisions.

  • No sales tax, including local option sales tax, will be collected on sales of an article of clothing or footwear having a selling price less than $100.
  • The exemption does not apply in any way to the price of an item selling for $100 or more.
  • The exemption applies to each article priced under $100 regardless of how many items are sold on the same invoice to a customer.

For more information and a complete list of what’s included in the tax holiday, visit the state’s website at https://tax.iowa.gov/iowas-annual-sales-tax-holiday.

Date

Aug 02 - 03 2024
Expired!

Time

All Day
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