TAX NEWS - 2010

Tennessee Tax: White Countians making plans for Sales Tax Holiday

Sparta residents are making plans for some discounted shopping as they begin their annual purchases of back-to-school items for their children, as well as taking advantage of bargains that will also benefit the parents.

Tennessee's Annual Sales Tax Holiday is set for the first Friday in August and ends the following Sunday night. The official 2010 tax-free weekend begins at 12:01 a.m. Friday, Aug. 6 and ends 11:59 p.m., Sunday, Aug. 8.

Anyone can benefit from tax-free purchases during this specified time period. The holiday also includes purchases of qualified items sold via mail, telephone, e-mail or Internet if the customer orders and pays for the item and the retailer accepts the order during the holiday for immediate shipment, even if delivery is made after the exemption period.

If a customer wants to order a certain tax-free item during the holiday and it is not in stock, the item remains tax-free upon delivery.

Qualified items previously placed on layaway are exempt when the final payment is made during the holiday. Items are also exempt when the final payment is made during the holiday and the final payment is made after the exemption period.

Tax-free items include clothing with a price of $100 or less per item and computers with a price of $1,500 or less. These items are exempt from state and local sales tax during the holiday. Local governments are reimbursed lost sales tax revenues by the state.

Some of the clothing items (must be $100 or less per item) that are tax-free include belts, caps, coats, dresses, gloves, hats, hosiery, jackets, jeans, neckties, pants, scarves, school uniforms, shirts, shoes, socks, sneakers and underwear.

School supplies are also exempt from sales tax and include binders, book bags, calculators, chalk, crayons, erasers, folders, glue, lunch boxes, notebooks, paper, pens, pencils, rulers, scissors and tape.

School art supplies that are exempt include clay and glazes, paints, paintbrushes, sketch and drawing pads and watercolors.

Computers prices at $1,500 or less are exempt from tax.

Laptop computers, if priced at $1,500 or less, also qualify. For purposes of this exemption, a computer is defined as a central processing unit (CPU), along with various other components including monitor, keyboard, mouse, cables to connect components, and preloaded software. While the CPU may be purchased separately, other items must be part of a bundled computer package in order to be eligible. Software beyond what is preloaded with the computer package is not exempt from tax.

The first annual sales tax holiday in Tennessee was Aug. 4-6, 2006, saving Tennesseans about $15 million. During the following annual tax-free weekends, Tennesseans saved $8 million to $10 million in tax savings each holiday.

For more information about Tennessee's Sales Tax Holiday, log onto http://tennessee.gov/revenue/salestaxholiday/