Today, August 1st, 2025, the annual State Tax Holiday makes its return and runs through midnight on August 14th.   

During this time, consumers will be able to purchase almost any tangible personal property priced at $500 or less without sales tax. However, this does not include motor vehicles, watercraft, alcoholic beverages, tobacco, vapor products, and marijuana-containing items—those products remain taxable during this period.   

Some examples of tax-free products include computers, televisions, clothing, books, textbooks, furniture, home decor, sporting goods, indoor and outdoor plants, and dining in at restaurants.   

The tax-free discount is calculated on a per-item basis, not on the whole shopping cart. As long as each individual item is priced under $500, you get the discount!   

A couple of items to keep in mind while you're out shopping or if you're a retail business during the holiday:    

1. Items normally sold as a unit must be sold that way to remain exempt.    

2. Rest assured, online sales qualify if the order and payment occur during the holiday for immediate shipment, even if the delivery date is scheduled for after the period has ended. Shipping and handling for fully exempt shipments are exempt from taxation. Mixed shipments require the allocation of shipping charges.  

3. Exchange and return rules vary based on timing and whether the replacement is identical or different.   

4. For sales of both exempt and taxable items at one price, tax applies to the full price. If separately stated, the exemption applies to the qualifying items.    

As you prepare your shopping lists or your business for the next two weeks, remember that our team of tax experts is here to support you. If you have any questions, don't hesitate to contact your bhm tax advisor for further guidance!