Tax free holiday returns next week

Published 9:00 am Thursday, October 12, 2023

By Jeff Moore

The K-V Dispatch

Make plans now to stock up on items such as school supplies, clothing, footwear and hurricane preparedness supplies as Virginia’s sales tax holiday returns Oct. 20-22.

It also provides an opportunity to make some larger purchases of Energy Star and WaterSense qualified appliances and products free of sales tax.

Offering a chance to save 5.3% on eligible purchases, the sales tax holiday was left in question for 2023 when it expired June 30 as the General Assembly failed to approve a budget. It was reinstated when lawmakers finally reached a compromise that won approval Sept. 6 and included amendments bringing back the weekend to shop free of sales tax.

Gov. Glenn Youngkin pushed for the sales tax holiday as part of his effort to reduce taxes on Virginians. The governor’s spokeswoman Macaulay Porter said he is pleased the General Assembly included it in Virginia’s budget.

“The governor encourages Virginians to take advantage of the sales tax holiday during the weekend of Oct. 20,” she said.

Virginia Department of Taxation Director of Communications and Training Heather L. S. Cooper explained that the previous sales tax holiday guidelines on the Virginia Regulatory Town Hall site applied until July 1 of this year.

The General Assembly closed its session in March without taking action to extend it, along with not reaching agreement on the state budget.

MAKING CHANGES IN SEPTEMBER

During the special session where the budget compromise was reached, Cooper explained that amendments to House Bill 6001 “reinstated the combined retail sales and use tax holiday, applicable to Energy Star or WaterSense qualified products, school supplies, clothing and footwear, and certain hurricane preparedness equipment, through July 1, 2025.”

Cooper provided the guidelines for the upcoming sales tax holiday that were published in a department document Sept. 15.

It states this year’s delayed program begins at 12:01 a.m. Friday, Oct. 20 and ends at 11:59 p.m. Sunday, Oct. 22. Future ones will return to the first weekend of August that has been the traditional time for the savings program, falling ahead of the opening of the school year.

The program includes the maximum price of individual items that are eligible for purchase, but no limit on the total amount a person can spend as they stock up during the sales tax holiday.

Here are the guidelines for making purchases on qualifying items:

SCHOOL SUPPLIES, CLOTHING AND FOOTWEAR

• New or used school supplies must have a selling price of $20 or less each. The department’s document defines school supplies as “means an item that is commonly used by a student in a course of study. For purposes of the sales tax holiday, the term does not include computers.”

• Each new or used item of clothing or footwear must be $100 or less. The guidelines state that clothing is “any article of wearing apparel and typical footwear intended to be worn on or about the human body. Clothing does not include sporting equipment or footwear designed primarily for athletic activity or protective use and not usually considered appropriate for everyday wear.”

ENERGYSTAR AND WATERSENSE ITEMS

• These eligible items must carry the designation from the Environmental Protection Agency or the Department of Energy that they meet or exceed the requirements of the appropriate federal program.

• Items must be priced at $2,500 or less each.

• Can only be purchased for non-commercial home or personal use

• Carry the Energy Star or WaterSense label

OTHER SALES TAX HOLIDAY DETAILS

The guidelines published by the state Department of Taxation explain that items purchased during the sales tax holiday can be exchanged for a similar item without additional tax due, even if this is after the exemption period.

However, it states if a return is made and a customer receives credit back for the item and then makes a separate purchase that sales tax must be charged in this case.

The guidelines explain that in specific instances, shoppers can also make layaway purchases and get the sales tax savings.

“The sale of a qualifying item under a layaway sale is exempt from tax if the purchaser selects the item and the retailer accepts the order for the item during the holiday period, even if delivery occurs after the holiday period,” the guidelines state. “Subsequent payments are also exempt. Items placed on layaway prior to the sales tax holiday are eligible for the exemption only if final payment is made during the exemption period.”

There are other limitations on purchases to ensure they fall under the eligibility pricing limits. For example, guidelines explain a $120 pair of shoes can be broken down into two $60 per shoe items, because they are normally sold as a unit.