This page covers the 2009 Sales Tax Holiday Schedule.

With the economy in a funk and consumers looking to save as much as they can, one of the best ways to shave several percentage points off your purchase is to wait until a sales tax holiday! States started having sales tax holidays several years ago and discovered that a lot of people were taking advantage of them. It’s the perfect marriage of consumer saving money and their representatives earning brownie points for giving them that opportunity. Despite the numerous reports of state budget shortfalls, many of these sales tax holidays are still in effect. I don’t expect to see many state legislators introducing bills canceling “long” standing sales tax holidays!

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This page covers the 2008 Sales Tax Holiday Schedule. Here is the latest 2009 Sales Tax Holiday Schedule.

Since many states are having their first tax-free period (for hurricane preparedness) this weekend, I thought it would be helpful if someone did a recap of all the tax sales across the nation (I’m unaware of a similar list for 2008 existing anywhere), so I did searches of all the states and collected the information on any sales tax holidays they are having. Many states have scaled back the tax-free program because of projected tax revenue shortfalls (Florida canceled its spring tax sale for hurricane preparedness supplies and shortened its typically ten day school supply tax-free period to seven days) but many still have some sort of program in place.

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In the discussions on Huckabee’s support of the Fair Tax, the idea of a value added tax (VAT), a type of consumption tax, was raised. Having little experience with it myself, I thought it would be valuable to turn to someone who actually did – Plonkee. As a resident of the UK, Plonkee has more first hand knowledge of the VAT so I asked her to describe it for us. This is not to say that the UK’s version of a VAT is how every VAT is, but seeing as how our cultures are basically siblings, it’s not a bad thing to understand.p

What is VAT?

In the UK, as in almost all of rest of the European Union, we have both an income tax, and a consumption tax – in the form of VAT. Like most taxes over in the UK, they are levied by central government and are used to fund both central and local government functions and services.

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We learned last year that taxpayers who itemize have the option of claiming their state and local income taxes or their state and local sales taxes as an itemized deduction on their 2005 returns and that this year will be the last year you will have that option (on your 2006 returns for your 2005 Tax Year).

The rule is that you can deduct actual state and local sales taxes (actual means you must keep receipts) or you can deduct values taken from the sales tax tables. By using the optional general sales tax tables, you don’t need to keep receipts. When you use the optional tables, you can add the tax on big purchases such as a car, plane, boat, mobile home, or home renovation to the total. So if you read off the table that you are eligible to claim a $779 deduction for sales tax and you just bought a $10,000 car in Maryland, you can add $500 (MD Tax is 5.0%) to the optional table value for a total deduction of $1,279.

Where are the sales tax tables? Where is Publication 600?
The tax tables that were available as Publication 600 last year were rolled into the 2005 Instructions for Schedules A & B (Form 1040) on pages A-10 to A-11.

For more information, please read the press release from the IRS.

This article has been made somewhat obsolete for 2006 (2005 tax year). The rules are the same but the documents you reference have changed. See the note at the end of the article.

Welcome to the second article in a series I call Tax Relief 101 designed to help you save some cash from the tax man. You can see the whole collection under the category of Tax Relief 101.

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