Don't Mess With Taxes

Shopping during a pandemic will be challenging, but Alabama retailers and customers hope the state's annual back-to-school sales tax holiday this weekend will make everyone as happy as this young shopper.

It's on! It is Alabama's annual Back-to-School Sales Tax Holiday weekend.

It starts at 12:01 a.m. on Friday, July 17, and runs until the clock strikes midnight on Sunday, July 19.

And yes, everyone knows that we're still in the midst of the COVID-19 pandemic. Cases are increasing throughout the United States, with the South one of the hardest hit areas. Businesses and officials in Alabama, however, are going forward with the annual shopping event.

Four broad areas of consumer goods qualify for Alabama's sales tax savings this weekend. They are clothing priced at $100 or less; books priced at $30 or less; school supplies at $50 or less; and computers and software priced at $750 or less.

Shopper and economic health issues: Last month when retailers, tax officials and shoppers started planning for the annual tax-free shopping weekend while also confronting health concerns, Alabama Retail Association President Rick Brown emphasized the economic component.

"This year's sales tax holiday will provide momentum for Alabama's continued economic recovery," said Brown. But he also noted why shoppers like the event: "Saving money for consumers while stimulating sales for stores is what this weekend is all about."

In the last few weeks, however, COVID-19 cases have flared across the South. The question now is whether Alabama shoppers will find the tax savings sufficient to entice them to, as Brown also urged, shop at "businesses that have a physical presence in your local area" to help keep those companies open and "your neighbors employed."

State and local tax savings: This is the 15th year Alabama has held a back-to-school sales tax holiday. The savings come not just from the waiving of the Yellowhammer State's 4 percent sales tax, but also the no-local-sales-tax collection decision by cites that take part in the tax holiday.

The Alabama Department of Revenue has an online list of local jurisdictions that are participating in the 2020 tax-free event.,

You also can check out, and download if you want to take it with you to stores, the state's reference sheet of what items are and aren't tax-exempt this weekend.

Online tax savings limits: Some shoppers, however, might not want to actually go into a store because of coronavirus concerns. Such a socially-distant shopping alternative might be more appealing given the state's recent coronavirus data.

Yesterday, July 16, Alabama recorded its second highest count of COVID-19 cases for a single day. The Alabama Department of Public Health reported 1,933 confirmed cases on Thursday. That's just shy of the Yellowhammer State's record of 2,164 cases on July 9.

So if shoppers opt to buy online instead, do this weekend's sales tax savings apply to qualifying items purchased via the internet?

Maybe. It depends on when you order an eligible item and when it is delivered.

The state's sales tax holiday law says that qualifying items are exempt from the state's (and participating local) sales tax "when the items are paid for and delivered to the customer during the exemption period."

For example, if you order something online today, Friday, July 17, and it's delivered before midnight on Sunday, July 19, the purchase is tax-free.

If, however, you ordered it earlier this week and it arrives this weekend, sorry. The sales tax still applies. You technically didn't buy during the holiday.

Similarly, if you shop online today, but the tax-free-eligible product can't be delivered until Monday, July 20, then sales tax will be tacked onto that purchase.

Order ahead, pick up quickly: If you'd like to spend as little time possible in a store, even if you take coronavirus precautions, I suggest you call the local business that has what you want and ask if you can buy it online or over the phone.

If such an option is allowed, do that. Then pick up your tax-free purchase curbside.

I suspect many retailers will make such sales and delivery accommodations.

Regardless of which shopping method you use, be a savvy consumer. Know what you want, make sure it's tax-free and don't be tempted to buy other items that will add to your shopping and sales tax bill.

And, of course, be a safe shopper.

If you do go into a local Alabama store this weekend, wear a face mask and stay as far away from other shoppers and store employees as you can. You definitely want to safeguard your health so you can enjoy your tax-free purchases.

More tax holidays on the calendar: Alabama's back-to-school tax holiday is the first of 16 such events planned for this summer. You can see whether your state has one and if so, when those tax-free shopping days will be in my earlier post detailing the 2020 summer sales tax holidays.

Here's a preview. Two more events start at the literal end of July. Sales tax savings begin on July 31 in Mississippi and Tennessee. The other 13 events are in August.

You also might find these items of interest:

• The wide range of state and local taxes
• Tax holidays are popular, but bad tax policy
• 6 shopping tips to maximize sales tax holiday savings

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