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Back-to-school tax holiday returns, with changes

Florida's back-to-school sales tax holiday returns for the 11th time from Aug. 12 through 14, with some modified rules.

The state will forsake $30 million in sales tax collections over that three-day weekend on clothing, shoes and school supplies in hopes a 6 to 7 percent tax savings will stimulate business.

While critics claimed the tax holiday only spreads retail sales over a longer period, studies by the Florida Retail Federation found the state actually gains sales tax collections. That's because people buy other taxable goods while they are out back-to-school shopping.

"Sales stagnated some of the years we did not have a tax holiday," said Rick McAllister, chief executive of the Florida Retail Federation.

Changes in what's exempt this time include:

• The price of eligible clothing and shoe items has been increased to $75 apiece, up from $50 last year.

• The price tag for each qualifying school supply item has been lifted to $15, up from $10.

• Books were dropped from the tax exemption list this year, but sales of the Bible, as always, remains exempt from Florida sales tax.

The basic ground rules have not changed:

• The exemption applies to the price of the exempt item, not the value of the total sale, and there is no limit on the quantity purchased.

• The tax exemption is available to any shopper and not limited to back-to-school purchases.

• Tax exemptions apply at mail order houses like online retailers, gift cards and layaway sales as long as the final payment is made during the tax holiday.

• Exchanges remain tax exempt after the holiday only if an item is returned for a different size or color.

Some head scratchers, thanks to tax law writers aiming to narrow purchases to school-related purchases:

• Notebook paper is exempt from sales tax but computer paper isn't.

• Backpacks and fanny packs are exempt, but not luggage like briefcases or garment bags.

• Gloves are exempt unless they are batting gloves, rubber or for bicycling.

• Hunting vests, sports uniforms and bowling shoes are exempt because kids might wear them to school. But football pads, water ski vests and skates are taxable.

• Handbags and hair accessories are exempt, but not handkerchiefs, jewelry or watches.

Tax-free items are available to nonresidents, but to limit the benefit to vacationers, exemptions do not apply to transactions in theme parks, airports or hotels.

You can learn more at dor.myflorida.com/dor/.

Back-to-school tax holiday returns, with changes 08/02/11 [Last modified: Tuesday, August 2, 2011 9:43pm]
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