If you were planning to use the upcoming sales tax holidays as a means of stocking up on your back-to-school essentials—or any other purchases for the fall season—you'd better read the fine print.
Just take a look at the rules surrounding Halloween costumes. Shoppers in states like Georgia, for example, will be able to snag theirs tax-free over the next few weeks. In some places, like Texas, that exemption applies only to children's costumes.
Even in some states where costumes are eligible, stand-alone purchases of masks—which do not fall under the apparel category—are ineligible.
Despite the complexity of sales tax holidays, which provide shoppers in participating states exemptions on certain merchandise, they continue to be a popular driver of back-to-school spending.
Take Massachusetts. Last year, traffic over its two-day tax holiday increased 23.9 percent compared to the prior weekend, while sales increased nearly 60 percent, according to RetailNext data.
This year, with the addition of Ohio to the mix, a total of 18 states and Puerto Rico will hold these holidays. That includes the assumption that Massachusetts, which traditionally waits until the end of July to make its decision, will once again participate.
"What retailers often do is they will put on additional promotions that surround or [are] at the same time as the sales tax holiday," said Charles Maniace, director of tax research at Sovos Compliance. "They sweeten the pot a little bit and that really drives the traffic."