Iowa’s back-to-school sales tax-free holiday starts Friday

Families hoping to save money on back-to-school shopping can take advantage of Iowa’s annual sales tax holiday Friday and Saturday.

The once-a-year exemption period starts at 12:01 a.m. Friday and runs until midnight Saturday. The tax-exempt weekend does not include Sunday. Iowa’s sales tax typically is 6 to 7 percent — depending on local-option sales taxes — but that tax is waived on some items for the tax-free holiday.

On Friday and Saturday, clothing and shoes under $100 will be free of sales tax, which means consumers will save at least $6 on every $100 spent for clothing and shoes.

“With the average family spending $864 on back-to-school items, that’s almost as much as people spend for the winter holidays,” said Carol Ehlers, a human sciences specialist in family well-being with Iowa State University Extension and Outreach. The $864 amount she cites is from the National Retail Federation.

“Many households set aside money year-round to help cover their holiday expenses and the same should be done for back-to-school purchases. This should not be a surprise and needs a spending plan,” she said.

Back-to-school shopping is expected to cost an average of $605 per child this year, and 54 percent of families will spend more than last year, according to Savings.com.

Examples of tax-free items include underclothes, sneakers, coats and jackets, belts, jeans, diapers and work uniforms. The exemption does not apply to any item that costs $100 or more. For a full list of Iowa’s tax-free items for the sales tax holiday, visit revenue.iowa.gov/media/112/download?inline=.

The exemption does not apply to backpacks, watches and jewelry, umbrellas, clothing repairs or alterations, sporting equipment or other special clothing or footwear for athletics.

All businesses open during the tax-free holiday must participate, according to the Iowa Department of Revenue. Eligible items purchased online, by mail order or catalog are also exempt if ordered and paid for during the exemption period.

Manufacturer’s coupons do not reduce the sales price of an item and cannot be used to reduce the selling price of an item to less than $100 in order to qualify. But a store coupon or discount can be used to reduce the sales price of an item to less than $100 to qualify. Retailers also can put items on sale that normally retail above $100 in order to help shoppers qualify for the exemption.