America Needs a Back-to-School Sales Tax Holiday
Only 17 states offer a tax-free weekend for parents fulfilling school supply lists, but given the increasing cost of supplies, tax savings should be rolled out nationwide.
As the new school year approaches, parents all over America are preparing to shop for the items on their kid’s annual school supply lists. But the frustration of finding the specific scissors or the precise calculator is nothing compared to the panic of checking the checking account balance after the deed is done. School supplies cost $670 per child on average according to the National Retail Foundation. That’s a lot, which is why 17 states offer tax-free school supply shopping weekends. That still leaves parents in 28 states without relief (Alaska, Delaware, Montana, New Hampshire and Oregon don’t have sales tax). The situation begs this question: Why aren’t the tax-free school supply weekends a nationwide phenomenon?
Before directly addressing the pertinent queries, let’s do the numbers. The nation’s average state sales tax sits around 8.45 percent. If we subtract that average from the average cost of school supplies a parent will save somewhere around $57, or about enough for an extra school outfit. That said, if you add in larger purchases, like laptops, the savings become even greater. California, for instance, has one of the highest sales taxes in the country at about 7.25 percent but it does not offer parents a tax holiday on school supplies. If it did, a parent purchasing their kid a $2000 laptop for school could save $145 in taxes.
For many parents, the money saved in states with school supply tax holidays is critical to their budgets. This is particularly true for poor parents for whom school supplies represent a significant chunk of their budget. Imagine a family of four with two school-aged children, making 138 percent of the federal poverty level, which qualifies them for medicaid benefits. That family is earning around $33,948 a year. However, the average cost of living in the United States for a family of four (not including non-essential spending) is about $65,000 a year. So tax savings of $100 on school supplies (around $50 per kid) is a significant saving. It might mean an extra trip to the grocery store and one less trip to the food bank.
But tax savings also means that poor kids are more likely to show up at school with the supplies that allow them to be prepared to learn. Too many kids start school in a hole. How can we expect children to thrive in public education if they don’t have the tools they need to succeed? It’s like asking a carpenter to build a house without screws and nails. And while school supply tax savings don’t completely level the playing field between poor and middle-class kids, it’s certainly a step in the right direction.
But even beyond helping poor families, school supply tax holidays are a boon to states. After all, those tax savings will likely be spent elsewhere in the economy. Consider the fact that there are over 6 million children enrolled in public schools in California. Even if half of their parents bought a new laptop for their child, the tax savings would likely lead to a multi-million dollar shot in the arm to the California economy.
Part of the reason that tax-free weekends aren’t more widespread is likely because a majority of Americans don’t even know they exist. If you’re a parent in Arizona, California, Colorado, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia and Wyoming, you have no idea that you’re missing out on some extra dough in your pockets. You are unaware you’re being cheated by your state legislature.
The tale America likes to tell about itself is that family and education are enshrined as national priorities. But it’s proven daily, that story is largely myth. However, a national holiday to ease the burden of school supplies would go a long way to making that myth more of a reality.
Here’s when you can take advantage of your state’s tax-holiday weekend if you’re one of the lucky few:
- Alabama July 20 – 22
- Arkansas August 4 – 5
- Connecticut August 19 – 25
- Florida August 3 – 5
- Iowa August 3 – 4
- Maryland August 12 – 18
- Mississippi July 27 – 28
- Missouri August 3 – 5
- New Mexico August 3 – 5
- Ohio August 3 – 5
- Oklahoma August 3 – 5
- South Carolina August 3 – 5
- Tennessee July 27 – 29
- Texas August 10 – 12
- Virginia August 3 – 5
- Wisconsin August 1 – 5
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