The pressure is on to get the kids ready to go back to school – and topping your to-do list should be shop tax-free this weekend.
According to the Federation of Tax Administrators (FTA), Iowa is among 19 states this year offering a tax-free holiday for those shopping for back-to-school. Shoppers in Iowa can enjoy this once-a-year benefit on Friday and Saturday, Aug. 4-5.
The annual tax-free holiday begins at 12:01 a.m. on Friday and ends at 11:59 p.m. Saturday.
The tax-free weekend helps parents replenish their student’s wardrobes without paying state and local tax. The exemption will mean a savings of at least $6 on every $100 spent on clothing and shoes.
“With the average family spending $864 on back-to-school items, that’s almost as much as people spend for the winter holidays,” Carol Ehlers, a human sciences specialist in family finance with Iowa State University Extension and Outreach, said in an ISU news release.
“Many households set aside money year-round to help cover their holiday expenses and the same should be done for back-to-school purchases. This should not be a surprise and needs a spending plan,” she encouraged.
The exemption only applies to certain clothing and footwear priced under $100 – and not other back-to-school supplies. Iowa’s sales tax ranges from 6-7% depending on the location and any local option sales tax.
For a complete list of what’s included in the tax holiday, visit the state’s website here.
ISU Extension offers these tips for shoppers to take advantage of Iowa’s tax-free weekend:
- Plan ahead. Plan major clothing and shoe purchases ahead of Iowa’s state tax-free weekend event.
“Giving each student a chance to inventory what they can start school with and share their expectations, allows family members to better plan,” Ms. Ehlers said. “Everyone may not get exactly what they want but talking about it in advance will help set a positive tone.”
Consider using the tax-free holiday time to purchase not only what your students need now, but what they will need over the next several months.
- Set a budget and stick to it. Be careful not to overspend just because the tax-free weekend is occurring. According to National Retail Federation data, the average family with students in kindergarten through 12th grade spent $864 in 2022 on electronics, apparel, and other school items. Review last year’s spending for clothing and shoes to create a new spending plan.
“Let students make decisions within the amount of money they are allotted,” Ehlers said. “If they have more ‘wants’ than the family budget can afford, they may need to use some of their own money or earn money from odd jobs to make up the difference. Allowing students to be a part of these decisions gives them a chance to learn to manage money wisely.”
- Compare Prices. Use the sales circulars and visit websites to compare prices. Some stores may be willing to match the price offered in a competitor’s advertisement.
- Know the rules and expect a busy shopping weekend. The Iowa Legislature approved the tax holiday in 2000 to help boost the economy and give consumers a break. Previous tax-free holidays have shown to pump up sales for retailers ranging from big-boxes to mom-and-pop shops.
- The exemption applies to each article priced under $100 regardless of how many items are sold on the same invoice to a customer.
