Tax-Free Holiday for Back-to-School Shoppers Starts Friday

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Mechanical pencils and other supplies are featured prominently in the walkways of a local H-E-B.

Courtesy / Emma Cook

Mechanical pencils and other supplies are featured prominently in the walkways of a local H-E-B.

Perhaps nothing marks the end of summer vacation and the start of the back-to-school season more harshly than the school supply list.

Adding packages of yellow pencils, three-prong plastic folders, and a box of Kleenex to the purchase of new clothes and shoes for growing kids, the sting to a parent’s pocketbook is very real. The National Retail Federation estimates families are likely to spend an average of $685 on back-to-school shopping this year.

Enter the annual sales tax-free holiday in Texas, beginning Friday, Aug. 10, and running through Sunday, Aug. 12. During that time, most school supplies, backpacks, clothing, and footwear – even cold-weather earmuffs, football jerseys, and adult diapers – less than $100 can be bought tax-free from Texas stores or from online sellers doing business in the state.

Find a list of tax-exempt items and spending limits here.

“As Texas families begin the process of replacing their beach bags with book bags, Texas’ sales tax holiday is the perfect opportunity to save some money on the supplies families need before the school bell rings,” stated Texas Comptroller Glenn Hegar. “As a dad to three young children, I know how these expenses can add up.”

According to the Deloitte annual back-to-school survey, getting the kids ready to start another year of learning has turned into the second-biggest shopping season of the year, with 29 million households across the United States spending a total of $27.6 billion.

More than half of that will be spent on clothing and accessories, but a whopping $6 billion goes toward school supplies. Almost 60 percent of spending will be done in brick-and-mortar stores – mostly at mass merchant retailers and “dollar stores” – and 23 percent are purchases made online. Even Amazon honors sales-tax holidays for back-to-school shopping.

Texas is one of 16 states – among the 45 and the District of Columbia with a sales tax – that offer tax holidays in August. The annual event began here in 1999.

This year, the Comptroller’s Office estimates that Texans will save $90.3 million stocking up on about $1 billion in pens and pencils, backpacks, sneakers, and jeans.

Despite the weekend’s popularity, some parents avoid it simply due to the anticipated crowds. Natalie Cuellar, a mother of three, said she’s already ordered school supply kits online and bought her elementary-age children school clothes from local uniform supply store Dennis.

For other parents, the timing is off. A few schools start the new school year before tax-free weekend. For instance, Castle Hills and Lamar elementary schools have a year-round school calendar, and KIPP San Antonio started Aug. 7.

Even some states have lost interest. Louisiana, Georgia, and Massachusetts have all done away with the tax-free holiday. North Carolina lawmakers voted in 2013 to end the state’s tax holidays after officials determined it would save the state $16.3 million the following year.

The Institute on Taxation and Economic Policy estimates that states lost $300 million due to sales tax holidays in 2016. The tax policy organization also found that revenue lost through sales tax holidays ultimately would have to be made up elsewhere, such as through spending cuts or increasing other taxes.

Critics of the tax holiday say it not only robs the state government of funds, it also does little to promote economic growth. Tax-free holidays are “based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform,” according to the Tax Foundation.

They’re also “an inefficient means of helping low-income consumers and an ineffective means of providing savings to consumers.”

But for Erich Backhus, who plans to purchase school supplies this weekend, every penny matters when shopping for his kids, ages 7 and 8. “Money has been tight since I lost my job earlier this year and my new job pays much less,” said Backhus. “It’s only about 8 cents for every dollar, but it adds up.”

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