The Ottumwa Courier

Southeast Iowa

August 1, 2013

Sales tax holiday begins Friday

OTTUMWA — Getting ready to go back to school? This weekend is designed for you.

The Iowa sales tax holiday kicks in today and Saturday, giving consumers a break on many items they may be picking up for the school year. Iowa's sales tax of 6 percent is suspended on all clothing and footwear that sells for under $100.

Tim Kurtz, director of the Ottumwa Area Chamber of Commerce, said the weekend is a sort of kickoff to the back-to-school shopping season. But the relatively early date can take some people off guard.

“Sometimes this kind of sneaks up on people,” he said.

It's not just the state's sales tax that gets knocked off. The Iowa Department of Revenue says local option sales taxes are suspended for qualifying items as well.

The rules are simple for the most part. It's aimed at everyday clothing, not sports equipment or high-end fashion. The individual items purchased must sell for less than $100 to qualify. But items that sell as a group or pair (think shoes or suit sets), can't be split up to qualify.

The exemption isn't cumulative. You can buy as many clothing items that sell for $99.99 as you want, and none of those would trigger the sales tax. But you can't use a coupon or rebate to drop the price of an item below $100 and avoid the tax.

Kurtz said recent years haven't seen the kind of boost retailers would hope for. In fact, “the last couple years, sales have been flat.”

There's reason to think the same might be true this year. The National Retail Federation predicts the average family will spend $634.78 on back-to-school items. That's down about 8 percent from last year but up from both 2010 and 2011.

That concern has led some retailers to push awareness of the event, said Kurtz. But the comparatively limited scope of the sales tax break means it isn't a concern for every business.

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