TN lawmakers approve 2 tax-free holidays for 2020

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NASHVILLE — Tennessee shoppers can look forward to big savings on two special weekends this summer: This year’s original sales tax holiday will be July 31–Aug. 2, with a second tax-free holiday coming Aug. 7–9 for restaurants.

The first sales tax holiday was held in New York back in 1997. Fast forward to the year 2020, and in the middle of a global pandemic, the Tennessee General Assembly approved a second tax-free holiday for restaurant sales.

The state’s annual sales tax holiday happens every year at midnight on the last Friday in July and ends at 11:59 p.m. the following Sunday night. Items like clothing, school supplies and electronics can be purchased tax-free during this period. The eligible items include clothing and school supplies up to $200 or less. Computers and TVs that are $3,000 or less are exempt from sales tax.

The second tax-free holiday will be Aug. 7-9. Retail food and drink sales by restaurants and limited-service restaurants are exempt during this period. The second tax-free holiday weekend focuses on restaurant sales beginning at 12:01 a.m. on Aug. 7 and ends Sunday, Aug. 9 at 11:59 p.m.

During this time, the retail sale of food and drink by restaurants and limited service restaurants, as defined in Tenn. Code Ann. § 57-4-102, is exempt from sales tax.
Below is the breakdown of the first tax-free weekend that starts in about two weeks.

1st Tax-Free Weekend

Non-taxable items include:

  • General clothing that costs $200 or less per item (such as shirts, pants, socks, shoes or dresses).
  • School and art supplies that cost $200 or less per item (such as binders, books, backpacks, crayons, paper, pens, pencils, and rulers, and art supplies such as glazes, clay, paints, drawing pads and artist paintbrushes).
  • Computers for personal use, tables, smartphones, electronic readers, TVs and video game consoles, each with a price of $3,000 or less

Items that will still be taxed include:

  • Apparel items priced at more than $200
  • Jewelry and handbags
  • Sports and recreational equipment
  • School/art supply items priced at more than $200 each
  • Storage media, such as flash drives and CDs
  • Individually purchased software
  • Printer supplies
  • Household appliances

Items that are normally sold together (like shoes) cannot be split up to stay below the $200 maximum.

For more information, visit https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax-holiday.html.