Florida to provide two sales tax holidays in 2018

Florida will provide two sales tax holidays in 2018: a sales tax holiday for disaster preparedness supplies June 1–7, 2018, and a sales tax holiday for clothing and school supplies August 3–5, 2018.

Sales tax holidays are generally popular among consumers, and they get a great deal of good press. Yet tax experts often question their benefits. For starters, they often last only a day or two, making it difficult for people with inflexible work schedules or limited transportation to take advantage of them — the people who stand to gain the most from sales tax savings.

Tax-free periods also create extra work for retailers, especially those that sell qualifying items to customers in multiple states, or multiple locations within one state.

Retailers have to reprogram point-of-sale systems to ensure tax isn’t applied to qualifying items. They have to know if and where local tax is also exempt (some states, like Alabama, allow localities to opt out of the tax-free period). They also have to train employees and sometimes extra help is needed.

Nonetheless, many retailers welcome sales tax holidays because they bring more customers through the door or to the online store. Once there, customers are more likely to purchase non-qualifying items, boosting overall sales.

The 2018 Florida sales tax holidays are due to the enactment of House Bill 7807, which Governor Rick Scott approved on March 23. Read on for more details.

Disaster preparedness sales tax holiday

As its name suggests, the disaster preparedness sales tax holiday is designed to encourage Floridians to prepare for natural disasters such as hurricanes. During the tax-free period, tax doesn’t apply to the retail sale of the following items (listed with price restriction):

• Batteries (AAA-cell through D-cell, 6-volt, and 9-volt) ($30 or less)
• Gas or diesel fuel tanks ($25 or less)
• Ground anchor systems or tie-down kits ($50 or less)
• Food coolers, non-electric ($30 or less)
• Portable generators ($75 or less)
• Portable self-powered light sources ($20 or less)
• Portable self-powered radios, two-way radios, or weather-band radios ($50 or less)
• Reusable ice ($10 or less)
• Tarpaulins or other flexible waterproof sheeting ($50 or less)

While retailers may not opt out of the sales tax holiday, the tax-free period doesn’t apply to sales made within an airport, entertainment complex, theme park, or public lodging establishment.

Back-to-school sales tax holiday

The August holiday is designed to help ease the cost of getting children back into the classroom with clothes that fit and backpacks full of necessary supplies. During the weekend of August 3–5, tax doesn’t apply to the retail sale of the following items with a sales price of $60 or less:

• Bags (e.g., backpacks, diaper bags, and fanny packs)
• Clothing and footwear
• Wallets

The following items don’t qualify for the exemption:

• Accessories (e.g., jewelry, handkerchiefs, watches, or watchbands)
• Briefcases, garment bags, or suitcases
• Rollerblades, skates, skis, or swim fins
• Umbrellas

The exemption also applies to school supplies with a sales price of $15 or less. Qualifying items include, but aren’t limited to:

• Calculators, compasses, protractors, and rulers
• Crayons, pencils, and pens
• Cellophane tape, glue, or paste
• Composition books, legal pads, notebooks, and filler paper
• Computer disks
• Poster board and poster paper
• Scissors

Qualifying items purchased at an airport, entertainment complex, theme park, or public lodging establishment aren’t eligible for the exemption.

While participation in this sales tax holiday is mandatory for most businesses, it’s voluntary for retailers if less than 5 percent of their gross sales of tangible personal property in the prior calendar year were qualifying items. Such retailers may opt to participate but must notify the Florida Department of Revenue of their intention to do so, in writing, by August 1, 2018. They must also “post a copy of that notice in a conspicuous location” at the place of business.

In addition to these two sales tax holidays, the state is exempting any equipment to generate emergency electric energy at a nursing home facility that is purchased between July 1, 2017, and December 31, 2018. This exemption is limited to a maximum of $15,000 in tax for the purchase of equipment for any single facility. Qualifying purchases made prior to the enactment of House Bill 7087 are eligible for a sales tax refund. Businesses should contact the Department of Revenue for more details.

More than a dozen states are providing sales tax holidays in 2018. Learn more.