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Though the cost of sales tax may seem relatively minor, there are ways to increase your savings.
Saturday, July 27, 2013
Virginia’s annual sales tax holiday on school supplies and clothing will take place Aug. 2 through 4. During this time period, shoppers can purchase eligible school supplies priced $20 or less per item and clothing priced $100 or less per item without paying sales tax.
Though the timing of this holiday is to help parents prepare and save money for the upcoming school year, anyone can take advantage and save a few dollars.
“This is the most universal of our holidays,” said Joel Davison, public relations manager at the Virginia Department of Taxation, “because who doesn’t need clothes, shoes or office supplies?”
Though the cost of sales tax seems relatively minor — the Virginia Department of Taxation states it’s “generally five percent of the cost price” — there are ways to increase the savings.
The state has restrictions on what items qualify to be sold tax-free, but stores are welcome to absorb the sales tax on other merchandise. A retailer’s decision to pay the sales tax on other products for shoppers can vary from store to store, but if they choose to absorb the tax on popular products that are not exempt through the state, such as computers or televisions, that could mean big savings. Stores are allowed to advertise this additional sales tax absorption up to 14 days before the first Friday in August, so start looking for more details now.
“A lot of the big box stores, specifically, have maybe put everything in their store on sale,” Davison said.
Another way to save is to use a store reward card, store credit card or other credit card offering cash back or rewards.
For example, Target offers shoppers who pay with a Target REDcard five percent off. Combine the five percent discount from the credit card with the five percent tax-free discount and the savings add up.
If you’re purchasing school supplies at Kroger or Food Lion, you could get an extra discount by scanning your Kroger Plus Card or MVP Card. Let’s say the original price of a calculator is $21, but it is discounted to $15 for shoppers with a valid store reward card. That discount would make the calculator qualify to be tax-exempt, therefore saving the shopper five percent on sales tax in addition to the $6 reward card discount.
If you have a credit card that offers cash or product rewards, consider using that to pay for tax-exempt purchases. Though that reward may not be an immediate discount, you will still be compensated in the long run while saving on sales tax.
Coupons are an easy way to save extra, too. You can use a store or manufacturer’s coupon (or both, if stores allow stacking) to lower the price of an item and make it eligible to be tax-free. Coupons can also be used for already-eligible items, increasing the savings beyond the five percent sales tax.
What if the product you’re looking for is out of stock? Rain checks for eligible tax-free items can be honored if they are paid for within the tax-free weekend. As long as the rain check has been paid for, it can be delivered any time.
Rebates are a popular way for shoppers to save, but there are some restrictions on them during the tax holiday. Because rebates adjust the price of items after they have already been purchased , rebates can’t be used to lower the sale price of a product and make it eligible for tax exemption. For example, a rebate offering a $10 return on a $30 backpack will not put the backpack under the $20 tax-free threshold.
I posted a poll on the Shoptimist blog asking readers if they planned to shop during the tax holiday. Most said they did, followed by some readers who said they may go shopping but were not basing those plans on the holiday. Others said that they would rather avoid the crowds during the tax holiday and do their shopping at a later date.
Where do you stand on the subject? Join the conversation and take the poll on the Shoptimist blog at blogs.roanoke.com/shoptimist.
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