City, county joining in inaugural tax-free holiday
Soaring gas prices, higher costs at the grocery store and the monthly sticker shock that comes with your utility bill - everywhere you turn now days, someone has their hand out and in your wallet.
But, just in time for back-to-school, shoppers will soon get some relief in the form of a tax-free holiday. Starting at 12:01 a.m. on Aug. 4 and ending at midnight on Aug. 6, Alabama will hold its first sales tax holiday. The holiday gives shoppers relief on some taxes on certain school supplies, computers and clothing.
Madison currently assesses a 2.5 percent sales tax, with the county adding on an additional 1.5 percent. The state then assesses an additional 4 percent.
All retailers are required to participate on eliminating sales taxes on the covered items. City of Madison officials sent letters out last week to local merchants detailing the plan.
Generally, the holiday allows sales-tax free purchases on clothing up to $100 per item, computers, software and computer supplies up to $750 per item, school supplies and textbooks up to $50 per item and all other books up to $30 each.
But it's not just items for students that are covered. As long as the items meet the state guidelines, it doesn't matter for whom they are purchased.
Covered clothing includes all items deemed by the state to be "suitable for general use." They include belts, boots, caps, coats, gym suits, pajamas, and underwear. Tennis shoes under $100 are also tax exempt.
Belt buckles, briefcases, makeup, purses, jewelry, sewing equipment, sunglasses and umbrellas will be taxed.
Protective equipment, such as hard hats, safety or tool belts or breathing masks will be taxed. Sports equipment, such as athletic shoes, gloves, or goggles are not exempt during the tax holiday.
Computers and some software up to $750 per items will be tax exempt. This includes diskettes, personal digital assistants and printers. It does not include furniture designed to hold computers or non-educational video games.
Almost all school supplies up to $50 will be covered. Included are the back-to-school basics such as book bags, notebooks, calculators, crayons, paper, glue and lunch boxes.
It also includes art items such as clay and glazes, paints, paintbrushes, sketch pads and watercolors. Reference maps and globes are also covered.
Required textbooks on an official school book list with a sales price between $30 and $50 are also covered.
The tax holiday doesn't cover magazines or newspapers.