This week is Back-to-School Week at the Center for Economic Opportunity. We will feature commentary and analysis on affordability for families preparing for the new school year.
Tax-free week just kicked off in Maryland, my current state. During this annual sales tax holiday, Marlyanders can stock up on clothing and shoes without incurring a hefty 6% sales tax. Plus, the first $40 of any backpack is untaxed.
Sales tax holidays—spanning days, weeks, and even an entire month—are popular policy tools to provide families with financial relief as they get their children ready for the new school year. Consumers need not pay state, and occasionally local taxes, on certain items for a limited time.
States don’t all exempt the same items from state sales taxes or every dollar of items. For example, electronics like computers are tax-free in some states but not in most.
If only every state would implement a tax-free holiday.
Is Your State Offering a Sales Tax Holiday?
According to the Federation of Tax Administrators, 16 states and Puerto Rico will offer tax-free shopping for back-to-school in 2025. Check your state’s website for the specific items covered:
Alabama: July 18th-20th (Third Friday in July through the following Sunday annually)
Arkansas: Aug. 2nd-3rd (First Saturday in August through the following Sunday annually)
Connecticut: Aug. 16th-22nd
Florida: Aug. 1st–31st
Iowa: Aug. 1st-2nd (First Friday and Saturday in August)
Maryland: Aug. 9th-15th
Massachusetts: Aug. 9-Aug. 10
Mississippi: July 11th-July 13th
Missouri: Aug.1st-3rd (First Friday through the following Sunday)
New Mexico: July 25th-27th
Ohio: Aug. 1st-14th (First Friday, Saturday, and Sunday of August each year if a budget surplus exists.)
Oklahoma: August 1st-3rd (First Friday, Saturday, & Sunday in August)
Puerto Rico: July 12–13, 2025
South Carolina: August 1st-3rd (first Friday, Saturday, and Sunday in August)
Tennessee: July 25-27
Texas: August 8-10, 2025
Virginia: August 1st-3rd (First Friday in August through the following Sunday)
West Virginia: August 1st-4th (Friday before the first Sunday in August through the following Monday)
Fun statistics:
31 – The number of days for the longest Back-to-School tax-free holiday (Florida)
3 – The most common number of days for Back-to-School sales tax holidays
2 – The fewest number of days for Back-to-School sales tax holidays
Policy Matters
Red and blue states give their residents more green through sales tax holidays. Encouragingly, the mix of conservative and liberal-leaning states offering sales-tax holidays signals that this is a smart bipartisan policy.
However, in a stunning retreat, New Jersey cancelled its annual sales tax holiday last year. The 10-day tax holiday was enacted in 2022 and applied to school supplies, computers, and sports or recreational equipment (clothing is already tax-free). However, the New Jersey legislature repealed the tax-free holiday to save about $35 million per year.
Now, residents will have to swallow the tax increase on back-to-school items or hop across state lines to Delaware, which doesn’t have a sales tax, or travel to Connecticut, which will have a tax holiday next week.
States, especially those that implement high taxes, should embrace tax-free holidays for their residents.
States that regularly suffer from severe weather, such as Florida and Alabama, also offer separate sales tax holidays to purchase items for weather preparedness.
Bottom Line
Sales-tax holidays are a smart policy that leaves all families with more green as they prepare to send their kids back to school on that yellow school bus.