Tax Holidays – Just Another Way to Rip Off the Customer?

How to Save Money on Back-to-School Supplies - Photo by Andres Nieto Porres

One of my friends is a coupon queen. She's the type of person who will go to a check-out loaded with items and armed with the best deals. I swear I think sometimes she walks away from stores with lots of stuff while clerks scratch their heads because the store seems to owe her money. She knows how to save cash...but that takes lots of research and good timing.

As our state's annual tax holiday was approaching in early August one year, I asked this friend if she would be shopping for back-to-school supplies on those days. She simply made a face and said that she would be shopping at another time. That caused me to take a closer look at tax holiday deals with a bit more caution.

Perhaps the lawmakers created tax holidays with good intentions. Many folks on a tight budget have already spent tax refunds by the time school is ready to start while others face severe cutbacks with job loss or loss of unemployment benefits. Each year the public schools in our area publish a list of must-haves for each grade. I have three children in school. You are not alone if you feel those financial pains.

Back-to-school Tax Exempt Days - Photo by Marlith

Some states and even some local areas may declare tax-free days in which people can purchase certain school supplies without paying sales tax. Many times, these tax-exempt items include clothes, paper, notebooks, writing utensils, art supplies, sports equipment, computers, and more, but do these tax-free days really save the consumer money?

Many businesses also look forward to tax holidays. They know that customers may come in droves to purchase back-to-school supplies during that time. Some companies may increase prices just in time for those tax-free days. If the demand is going up, they seem to think that perhaps this would be a good time to increase resulting profits. The customer is often unaware of this increase, assuming that prices have simply gone up from the previous year. Do your summer homework. Research prices about three or four weeks before the tax holiday. Compare them to those during the tax holiday. It might be an eye-opening experience.

Items eligible for the tax holiday typically must be purchased on those days in order to qualify. Some of the higher ticket items in particular suddenly are in short demand on tax holidays. The solution? Research your state's requirements and see if layaway items qualify. If the store offers a layaway option, you can beat the crowd and have that item available with some pre-planning. Ensure that you understand all of the requirements for a layaway option – fees might be more than the tax. You might be able to purchase items online, but again check to ensure that online items qualify for the tax holiday and that you aren't getting burned with shipping fees.

If you are willing to spend some extra time shopping for clothes and sports equipment in particular, you may find cheaper deals by going green. Some friends might be more than willing to give you clothes their kids have outgrown for a very low price or perhaps even for free. Consignment and thrift shops may offer excellent deals, but the selection often dwindles quickly during the back-to-school tax holiday season. Check all used items to ensure that zippers zip, snaps snap, and that they are in good condition if you are going that route. You might be surprised at how many people donate broken, soiled, and stained items or items in severe disrepair for others to buy.

Save Money Shopping for School Supplies - Photo by Maurice07

Take a realistic look at exactly how much you are saving with a sales tax holiday. Is it worth fighting the crowds and taking the chance of having to return for supplies that were missing? The items covered during the tax exempt days are only a portion of costs you will likely incur when preparing for the school year. Most lists for my kids include things like hand sanitizer, paper towels, plastic bags, and other items not included for exemptions. You are unlikely to find many great deals on this type of item unless you are a smart shopper and perhaps a coupon queen like my friend.

Perhaps some of these tips may help shoppers to be a bit more savvy when looking for back-to-school items. Saving money is a necessity for many people, and back-to-school shopping can take a big bite out of the budget. Don't let a sales tax holiday take a bigger bite than necessary.

Readers may also wish to see:

• How to Find Money-Saving Tips for Fun Summer Activities
• Free Books and So Much More at the Local Library
• Great Low Cost Gift Ideas for Friends and Family Members

Find more of Katrena's articles at the Wildflower Bouquets site map.