Your guide to Iowa’s sales tax holiday

Good news, shoppers: Iowa's tax free holiday is back this Friday and Saturday.

During the two-day event, the state won't require sales taxes on clothing and footwear. Normally, Iowa's sales tax rate is 6 percent.

Here's what shoppers should know before heading out:

What is it?

The sales tax holiday is an annual event where consumers do not have to pay Iowa's sales tax. Local-option sales taxes also are exempt.

Businesses open during the holiday are required to participate.

When is it?

The holiday is the first Friday and Saturday of August each year. More specifically, it runs from 12:01 a.m. Friday through midnight Saturday. Sunday is not included.

What's included?

The sales tax holiday applies only to clothing and footwear that costs less than $100. Examples include coats, bow ties, dresses, martial arts apparel and formal clothes, among other items.

Store coupons or discounts that reduce the normal prices of items to below $100 mean those reduced items are exempt from the sales tax. Manufacturer's coupons can't be used to reduce the cost of an item to below $100.

Each item sold is exempt from sales tax, not just the cost of an entire bill.

What's not included?

Watches, jewelry, sports equipment, backpacks, luggage and footwear primarily used for athletics are not exempt from sales tax.

A full list of exempt and non-exempt items is available from the Iowa Department of Revenue at https://tax.iowa.gov/iowas-annual-sales-tax-holiday.

What about online purchases?

Eligible Clothes and footwear purchased online, by mail or through a catalog are exempt from sales tax if they are ordered and paid for during the sales tax holiday. They are also exempt if they are delivered on Friday or Saturday. They must be ordered or delivered to an Iowa address.

What if I exchange something after the holiday?

Sales tax will be due if consumers exchange an item they bought Friday or Saturday after the holiday.

l Comments: (319) 398-8366; matthew.patane@thegazette.com