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Iowa Sales Tax Holiday: What you should know

SIOUX CITY, Iowa (KTIV) – Iowa’s tax-free holiday is this weekend. With the holiday, come restrictions on what can be purchased with the tax-free exemption.

For nearly two decades, people have taken advantage of the discounts known as the Sales Tax Holiday.

But, there are some common misconceptions as to what exactly is exempt from taxes on these two days.

John Fuller of the Iowa Department of Revenue says this is one of the main things consumers are confused about when shopping during the weekend. “The sale of an article of clothing or footwear that’s less than a hundred dollars would qualify, you wouldn’t have to pay taxes. It would be tax-exempt,” said Fuller.

However some things that aren’t considered typical everyday wear will still have the sales tax so, things such as jewelry and sports cleats aren’t exempt from the holiday sale.

“Some things that you would wear on your body like watches, jewelry and rollerblades that you wear on your feet, you would have to pay taxes on,” Fuller said.

Another common misconception is that school supplies such as backpacks are included on the exemption list, however they don’t qualify.

“Supplies would not be, like pencils and pens and notebooks. But any kind of clothing that you would buy for the child’s school would be tax-exempt,” said Fuller.

This means any back to school clothes and school uniforms under $100 qualify for the sale.
The weekend is also a big day for retailers.

Chad Hofmann, manager at the Bomgaars on Gordon Drive in Sioux City says that they increase their staffing for the big day.

“We extra staff. Typically Friday and Saturday are both busy days for us. We just make sure we’ve got everything stocked and signed well,” said Hofmann.

Iowa’s Sales Tax Holiday starts at 12:01 a.m. on Friday, August 2 and ending midnight on Saturday, August 3. Sunday is not included.

For a full list of what is included and what isn’t click here.

Officials said businesses that are open on these days are required to participate and cannot advertise that they will pay the sales tax on items that don’t qualify.

Items such as shoes or suits that are normally sold as a unit cannot be split up and paid for individually to qualify for tax exemption.

With “Buy One, Get One Free” deals if the full-priced item is over $100 it will be taxed, but if the 50% off item is under $100.

When purchasing online, the items can be tax-exempt if the items are ordered and paid for on the exemption period days or if they are delivered during the exemption period.

If the customer is using a coupon that brings the total of the item down to under $100, the item is then tax-exempt.

For a full list of regulations about Sales Tax Holiday click here.

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