Legislation recently changed the date in Tennessee for the Annual Sales Tax Holiday. Starting in 2016, the “tax-free” weekend will be earlier than in the past and will be held from the last Friday in July through the following Sunday. The date change is expected to continue annually beginning this year at 12:01am on July 29, 2016 and ending at 11:59PM on July 31, 2016.
The term “tax holiday” refers to a temporary span off time when the government suspends certain taxes, like sales tax, on specific items. Ideally, the intention is to create a temporary reduction or elimination of tax as a means to incentivize business and consumer investment. For most states, the intention of a tax holiday just before school starts is a means to encourage the consumer to buy specific items such as clothing, school supplies, or computers. Although consumers are usually free to buy unlimited quantities of the specified merchandise, certain limits may apply. Tennessee structures the options for tax-free weekend with the following parameters:
What is Tax Free?
• Clothing and apparel such as shirts, pants, jackets, dresses, sock, and shoes that is $100 dollars or less
• School and art supplies with a purchase price of $100 dollars or less such as binders, pencils, books, backpacks, pens, paper, and crayons
• Computers that are $1500 dollars or less including laptops and tablets
What is not Tax Free?
• Items such as jewelry, handbags, or sports/recreational equipment or apparel that costs more than $100 dollars
• School and art supplies individually priced more than $100 dollars
• Video games consoles, storage media such a flash drives, cell phones and printers, keyboards or monitors when not purchased with an actual computer
Please consult the tn.gov specific sales tax holiday spreadsheets for a broader list of items here:
Anyone, not just students, can buy clothing, supplies, and computer equipment that qualifies during the tax holiday. It is important to note that all purchases are considered taxable if the consumer is intending to resale for business or trade nor did Tennessee’s new legislation change any other aspects of the sales tax holiday. Additionally, items such as shoes or art supplies that are normally sold together and priced over the $100 dollar threshold cannot be split to meet the guidelines.
For a comprehensive lists of Frequently Asked Questions, please visit:
-By Susan Amsler
June 6, 2016
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