Don't Mess With Taxes

If you're staying home this Memorial Day long weekend and home is Texas or a town near the Lone Star State border, you could save some tax dollars on energy efficient appliances.

Texas' annual Energy Star Sales Tax Holiday began at 12:01 a.m. today, Saturday, May 28. It runs until midnight Memorial Day Monday, May 30.

Energy and tax savings: During these three days, shoppers won't owe state or local sales tax on certain energy-efficient products with the Energy Star logo.

The state sales tax in Texas is 6.25 percent. Local jurisdictions -- cities, counties, special purpose districts, and transit authorities -- also may also impose added sales tax of up to 2 percent.

You can use the Texas Comptroller's online Tax Rate Locator tool to find your location's complete sales tax rates.

Many of us, including me and my fellow Austin residents, pay a maximum combined Lone Star sales rate of 8.25 percent.

And that top tax rate, which some Texas shoppers can save on some energy efficient purchases May 28-30, is this week's By the Numbers figure.

What's tax free? You can buy the following items tax-free in Texas during the tax holiday as long as the products display the Energy Star logo. They include:

• air conditioners (with a sales price of $6,000 or less)
• refrigerators (with a sales price of $2,000 or less)
• ceiling fans
• incandescent and fluorescent light bulbs
• clothes washers
• dishwashers
• dehumidifiers

If you also pay delivery, shipping, handling and transportation charges as part of your purchase, those charges also are tax free.

Limits on tax exemptions: But note the price caps on ACs and fridges. If your product's price, including any delivery fees, exceeds the tax free limits of $6,000 for air conditioners or $2,000 for refrigerators, you'll owe tax on the full, final sales price. The Comptroller gives this example:

You purchase an Energy Star refrigerator for $1,995 with a $50 delivery charge, for a total sales price of $2,045. Because the total sales price of the refrigerator exceeds the $2,000 cap for refrigerators, tax is due on the $2,045 sales price.

So do the math if you're shopping this weekend specifically to save on sales taxes.

If delivery fees negate your sales tax savings, you might want to make nice with your brother-in-law and see if he'll come over in his pickup truck and help you bring your new refrigerator home.

You can always offer to stock it with his favorite beer as an added enticement.

The Texas Comptroller has put together a FAQ page with much more information on this year's Memorial Day sales tax holiday. Check it out, then head out for some tax-free shopping!

No Louisiana, Virginia tax holidays this weekend: Long-time readers and tax-conscious shoppers in the Pelican State and the Old Dominion have no doubt noticed that their Memorial Day tax holidays are no more.

On this long weekend, Virginia and Louisiana used to waive sales tax on certain hurricane-related items. Memorial Day was a good weekend because of its proximity to the official June 1 start of the Atlantic hurricane season.

But last year, lawmakers in both coastal states changed their tax holiday rules.

In Virginia, legislation enacted by the 2015 General Assembly combined the state’s three sales tax holidays into one three-day holiday beginning the first Friday in August. 

During the single Virginia sales tax holiday period, shoppers get sales tax breaks on qualifying school supplies, clothing, footwear, hurricane and emergency preparedness items, as well as on Energy Star and WaterSense products.

I'll remind you as the Virginia sales tax date nears, but you might want to go ahead and mark your calendar. For 2016, that's August 5-7.

In Louisiana, the annual Hurricane Preparedness Sales Tax Holiday was not among the exemptions and exclusions considered during the state's recent special legislative session. That means there's no 2016 Louisiana sales tax holiday for hurricane preparedness items.

Louisiana lawmakers did provide for a partial hurricane preparedness sales tax holiday for 2017 and 2018.

For 2017, shoppers will get 2 percent tax break on certain hurricane prep products. This means they'll pay just 3 percent, instead of Louisiana's full 5 percent, sales tax on certain storm-related items.

In 2018, specified hurricane preparedness items will again be exempted fully from Louisiana state sales tax.

I know that the tax-free products in Texas this weekend aren't designed to help with a hurricane. But if any Louisiana shoppers are missing their tax holiday, I know Lone Star State retailers would be delighted to see all y'all cross the border.

You also might find these items of interest:

• Tax holidays: bonanzas or bogus?
• City and other local taxes add to overall sales tax takes
• Preparing for, dealing with and recovering from Mother Nature's catastrophes