Sales Tax Slice: ‘Happy Holidays’ to Purchasers of Energy Efficient Appliances, Weather Preparedness Items


An annual tradition in many states, is the sales tax holiday for clothing and school supplies, most often held in August. Some states also offer other tax holidays – for hurricane supplies, energy-efficient appliances, and even firearms. Sixteen states currently have “Back-to-School” holidays scheduled for this year. Whether a sales tax holiday is good tax policy has been the subject of debate.  

While the terms of state tax holidays often vary among jurisdictions, there is some uniformity among states that have signed onto the Streamlined Sales and Use Tax Agreement .

The first tax holiday of the year will be held in Maryland, from February 16-18, on EnergyStar appliances.Missouri will hold a similar holiday in April,Texas in May,Virginia in October, andNorth Carolina in November. 

Three states have severe weather preparedness holidays: Alabama in February, and Louisiana and Virginia in May.

 The most unique tax holiday is the annual firearms tax holiday held inLouisiana every September.

 Energy Star Holidays

The ENERGY STAR label was established to reduce greenhouse gas emissions and other pollutants caused by the inefficient use of energy. The label makes it easier for consumers to identify energy-efficient products that offer savings on energy bills without sacrificing performance, features, and comfort.

Maryland ’s tax holiday for energy-efficient appliances, Shop Maryland Energy, will take place February 16-18, and is typical of these holidays. The following types of items are exempt:

  • air conditioners,
  • clothes washers,
  • furnaces,
  • heat pumps,
  • standard size refrigerators,
  • compact fluorescent light bulbs (CFL),
  • dehumidifiers, and
  • programmable thermostats.

The above items are only exempt if they have been designated as meeting or exceeding the applicable ENERGY STAR efficiency requirements developed by the U.S. Environmental Protection Agency and the U.S. Department of Energy.

 

Severe Weather Preparedness Holidays

The first state to hold a severe weather preparedness holiday in 2013, is Alabama , from February 22-24. These holidays are aimed at the type of supplies taxpayers need to purchase to protect their homes from hurricanes. The following types of items are exempt from tax during the holiday period, if they cost $60 or less:

  • batteries
  • cellular phone chargers
  • portable self-powered or battery-powered radios, two-way radios, weatherband radios or NOAA weather radios
  • portable self-powered light source, including battery powered flashlights, lanterns, or emergency glow sticks
  • tarpaulins, plastic sheeting, p lastic drop cloths, o ther flexible, waterproof sheeting
  • ground anchor system, such as bungee cords or rope, or tiedown kit
  • duct tape
  • plywood, window film or other materials specifically designed to protect window coverings
  • non-electric food storage coolers or water storage containers
  • non-electric can openers
  • artificial ice, blue ice, ice packs, reusable ice
  • self-contained first aid kits
  • fire extinguishers
  • smoke detectors
  • carbon monoxide detectors
  • gas or diesel fuel tanks or containers

In addition, any potable power generator or power cords costing less than $1,000 are also exempt.

 

For additional information on state sales and use tax holidays, see Bloomberg BNA’s Sales and Use Tax Navigator at 10.3.

By Nancy Emison

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