Sales tax holidays date back to 1980 when Ohio and Michigan offered residents a one-time chance to skip sales tax on automobile purchases, according to the nonprofit Tax Foundation. However, in recent years, they have become an annual event in nearly 20 states.
During a sales tax holiday, a state encourages consumer spending by allowing tax-free purchases of certain items such as school supplies, computer equipment, clothing and footwear, and sometimes energy-efficient home appliances and severe-weather preparedness items. There is often a threshold on the dollar amount for qualified purchases.
“Tax-free weekends are an easy way to offset inflation,” says Howard Dvorkin, certified public accountant and chairman of Debt.com. “Buying (items) now tax-free could save you even more if those same items will have skyrocketing price tags later.”