Tennessee consumers will see back-to-back state sales tax holidays during the new two weekends.
The first is the traditional reprieve to paying the state’s 7% sales tax on back-to-school supplies, which begins Friday and ends Sunday.
The second is a new sales tax-free weekend created by state General Assembly earlier this year to help restaurants impacted by the novel coronavirus (COVID-19) pandemic. It will run from Aug. 7-9.
Help The Economy
State House Speaker Cameron Sexton, R-Crossville, said earlier this week the sales tax holidays were created this year by using non-recurring state money to offset the blow of state revenue shortfalls linked to the pandemic.
He said the idea of having an additional sales tax-free weekend came after legislators heard from Bill Fox, an economist with the University of Tennessee, who suggested extending the holiday would allow Tennesseans who are paid later in the month to take advantage of the sales tax savings.
The speaker said the second sales tax holiday is also geared to “spur the state’s economy” and help restaurants who have seen their business slowed by COVID-19.
Stays In The Community
Jim Brown, the state’s director of the National Federation of Independent Businesses, said in a statement this week that “small business is what powers Tennessee’s economy.”
He noted a study from American Express that found 67 cents of every dollar spent at a small business stays in that community. The study said it also creates an additional 50 cents in local business activity as employees and owners purchase local goods and services.
Bob Cantler, president/CEO of the Johnson City Area Chamber of Commerce, said members of his organization value the sales tax holiday because it encourages residents to “buy local” instead of online at a big box store. He said revenues from those purchases remain in the region, and helps the local economy.
With students in Washington County and Johnson City beginning the academic year in virtual classrooms, Cantler said the “challenge for parents” this year will be addressing the proper back-to-school supplies their children will actually need.
By The Numbers
The following items are exempt during holiday:
- General apparel that costs $200 or less per item, such as shirts, dresses, socks and shoes.
- School and art supplies with a purchase price of $200 or less per item, such as binders, books, backpacks, paints, drawing pads and artist paintbrushes.
- Computers for personal use with a purchase price of $3,000 or less.
- Tablets, smart phones and electronic readers with a purchase price of $3,000 or less.