Seventeen of the eighteen states that have enacted a state sales tax holiday have held theirs over the past few weeks; Texas has it slated for the weekend of August 17-19. Are you kicking yourself because you missed your window of opportunity to save on back to school supplies? Don’t! Tax-free sales weeks are not such a good deal for the consumer.
Here’s why: all states but Louisiana and Massachusetts limit the tax waiver to certain items. In addition, only items costing up to a specified amount—which varies from state to state, and by item—are eligible to be purchased tax-free. For example, Georgia limited eligible school-supply items to those priced at $20 or less. This means costlier items such as graphing calculators, where such an incentive would really make sense for the consumer, are ineligible. With a state sales tax of 4%, the most a parent could save on any one item, in this example, would be 80¢. So, in reality, the average buyer doesn’t save all that much.
I’m all for avoiding taxes, and after all, a penny saved is a penny earned. But if you’re not careful, you could actually end up paying more overall. Retailers are well aware that parents have a small window of opportunity in which to get their school shopping done. And when we have two or three children, our goal of saving money can quickly be overridden by convenience, because we just need to get all that shopping done! Knowing this, merchants bait us by strategically placing lower-priced items on sale, and intentionally keeping more expensive items at full price. So we might end overpaying on some items, thus canceling any benefit of the tax savings on the other purchases.
Read Related: How to Save $2K a Year on Groceries
If you really want to avoid paying sales tax, you can do so all year long by purchasing online. Many of the big e-retailers, like Amazon and Newegg, are not yet required to charge sales tax on anything they sell. Most offer a greater selection of products, and quite often at better prices, than your typical brick and mortar store. Some even offer free shipping.
For even greater savings, consider buying gently used items. Check out your local garage sales, Craigslist, and eBay. Not only are you bound to save a significant amount in comparison with buying new items, but will also avoid sales tax.
I think you’ll agree with me when I say the only thing better than getting stuff cheap is getting it free. Try getting together with other parents to swap your leftover books or backpacks from last year for items you need this season. This works best for you if the other children are a grade ahead of yours. In addition, many civic and religious organizations collect and re-distribute free school supplies to their local communities. Call your school, scan your newspaper, and search the Internet for these events.
The bottom line is, if you’re not careful, trying to get all your shopping done during a hurried sales tax holiday can actually backfire and cause you to overspend.