The State of Tennessee’s Annual Sales Tax Holiday is held every year, beginning at 12:01 a.m. on the first Friday in August and ending at 11:59 p.m. the following Sunday night. During this weekend, certain goods may be purchased tax free. This year’s tax-free holiday weekend begins at 12:01 a.m. on Friday, August 7 and ends Sunday, August 9 at 11:59 p.m.
As stores across Tennessee prepare for this weekend’s sales tax holiday, experts say the holiday is not much of a bargain for shoppers overall.
“Before there were sales tax holidays, there were lots of back-to-school sales. We still see some of those sales going on, but they don’t take place to the same degree. Instead, businesses advertise a sales tax holiday. What this means is the retailer is able to keep their price up,” said Bill Fox, Director of the Center for Business & Economic Research at the University of Tennessee.
Tennessee’s average sales tax rate is around 9.45% – that’s the highest in the country for the average. The sales tax holiday can save people money on more expensive items like computers where the price is same across the country and set by the manufacturer. But when the tax takes the place of back-to-school sales on other items, the savings aren’t really that big.
Ultimately, the big winners are the stores and businesses, not the consumer.
Friday through Sunday, shoppers in Tennessee will not be charged any sales tax on school supplies, clothing items up to $100, and computers up to $1,500 in price.
The Tennessee Department of Revenue says over the last five years, on average the state does not collect around $9 million in sales tax each year during the holiday. The Director of Communications for the Department of Revenue says the sales tax holiday does not hurt the state because the annual budget accounts for the lost revenue.
Let’s go shopping!