Tennessee Sales Tax Holiday

On the first Friday through Sunday in August every year Tennessee imposes a Sales Tax Holiday on Clothing, School Supplies and Computers.  The exemption starts at 12:01 am on the first Friday and ends at 11:59 pm on Sunday.

Taxes are not collected from individuals on the first $100 or less purchased on clothing items.  It does not include accessories such as jewelry or bags or sports and recreational equipment like baseball gloves.  For layaway sales, qualified clothing is exempt when final payments are made by customers on items previously placed on layaway.  Learn more about the clothing exemption by clicking here. 

Taxes are not collected from individuals on the first $100 or less purchased on school supplies.  According to the rules school supplies are defined as items used by a student in a course of study. Specifically excluded are items such as instructional material, including reference books and school computer supplies (compact discs, printers, and printer ink). Learn more about the schools upplies exemption by clicking here.

Taxes are also not collected from individuals on purchases of $1,500 or less for computer items.  According to the rules for purposes of this exemption, a computer is defined as a central processing unit (CPU), along with various other components including monitor, keyboard, mouse, cables to connect

components, and preloaded software.  Only preloaded software is exempt.  Delayed shipments, backorders and layaways also qualify for the exemption.  Learn more about the computer supplies exemption by clicking here.

Retailers can offer coupons and discounts to reduce the price of an eligible item to $100 or less.  This applies to all discounts even if a retailer’s coupon or loyalty card is required to secure the discount.  Retailers can accept exchanges for items purchased during the tax holiday without charging tax.  However, if the customer wantas to exchange the item for credit or a different item then the sales tax would apply.

Rebate items don’t qualify for the tax exemption because it usually occurs after the sale.  Rain check items redeemed during the Sales Tax Holiday qualify for the tax exemption.

Shipping & handling charges can be exempt if the total cost (to include shipping) falls withing the sales tax holiday price threshold of $100 or $1,500.

Retailers can learn more about the rules by clicking here.

Sources:
TN Sales Tax Holiday
Retailer Rules

By Wendy Stewart