Florida’s 2017 Back-To-School Sales Tax Holiday: Dates, Details

Florida’s back-to-school sales tax holiday is right around the corner. Patch has the details you need to know to cash in on the savings.

As the countdown begins for the start of the 2017-18 school year, parents will find a financial break is on the way to help them prepare their children for hitting the books. Florida’s 2017 Back-to-School Sales Tax Holiday takes place the first weekend in August.

Approved by the Florida legislature and signed into law by Gov. Rick Scott, the annual holiday provides tax-free shopping on traditional school supplies and clothing. This year’s holiday also makes some computers and accessories tax-free.

 

 

Back to School Sales Tax Free

Here are the details parents need to know:

The Dates

This year’s tax-free holiday runs from 12:01 a.m. Friday, Aug. 4 until 11:59 p.m. Sunday, Aug. 6.

What Qualifies For Tax Breaks

Here’s a rundown of items that will ring up at the register without taxes during the Aug. 4-6 period:

  • Clothing, shoes and some accessories that cost $60 or less per item
  • School supplies that sell for $15 or less per item, such as paper, pencils, pens, notebooks
  • Personal computers and some computer-related accessories with price tags of $750 or under. These items must be purchased for noncommercial home or personal use.

What Doesn’t Qualify For Savings

Tax breaks will not apply on the following items:

  • Any clothing item that costs more than $60
  • School supplies that cost more than $15
  • Books that are not otherwise exempt
  • Personal computers that cost more than the $750 cutoff or those that are intended for commercial use
  • Rental or leases on any items that would be eligible if purchased outright
  • Repairs or alterations to eligible items

Tax breaks will not be given on eligible items that are purchased at entertainment complexes, theme parks, public lodging establishments or airports.

Articles Normally Sold as a Unit: Articles normally sold as a unit must continue to be sold in that manner; they cannot be separately priced and sold as individual items in order to qualify for the sales tax exemption.

Sets Having Exempt and Taxable Items: When tax-exempt items are normally sold together with taxable merchandise as a set or single unit, the sales price of the set or unit is subject to sales tax.

Gift Cards: The sale of a gift card is not taxable. A gift card does not reduce the selling price of an item. Eligible items purchased during the sales tax holiday period using a gift card will qualify for the exemption, regardless of when the gift card was purchased. Eligible items purchased with a gift card after the sales tax holiday period are taxable, even if the gift card was purchased during the sales tax holiday period.

Buy One, Get One Free or for a Reduced Price: The total price of items advertised as “buy one, get one free,” or “buy one, get one for a reduced price,” cannot be averaged for both items to qualify for the exemption.

Exchanging a Purchase after the Sales Tax Holiday Expires When a customer purchases an eligible item during the sales tax holiday period, then later exchanges the item for the same item (e.g., different size or different color), no tax will be due even if the exchange is made after the sales tax holiday period. When a customer purchases an eligible item during the sales tax holiday period, then later returns the item and receives credit on the purchase of a different item, the new item purchased is subject to sales tax.

Coupons, Discounts, and Rebates: The sales price of an item includes all consideration received by the retailer for that item. The price of an item is not limited to the amount paid by a customer. A coupon, discount, or rebate offered by the retail seller reduces the sales price of an item because it reduces the total amount received by the retail seller for the item. When a retailer is reimbursed for the amount of any discount created by a manufacturer’s coupon, discount, or rebate, the amount of the reimbursement is included in the taxable sales price of the item.

Rain Checks: Eligible items purchased during the sales tax holiday period using a rain check will qualify for the exemption regardless of when the rain check was issued. However, issuance of a rain check during the sales tax holiday period will not qualify an eligible item for the exemption if the item is purchased after the sales tax holiday period.

Layaway Sales: A layaway sale is a transaction where merchandise is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and receives the merchandise at the end of the payment period. Eligible items sold as layaway sales qualify for the exemption when the customer:

  • Accepts delivery of the merchandise during the sales tax holiday period, or
  • Puts an eligible item on layaway, even if final payment is made after the sales tax holiday   period.

Mail-Order, Catalog, or Online: Sales Eligible items purchased by mail order, catalog, or online are exempt when the order is accepted by the company during the sales tax holiday period for immediate shipment, even if delivery is made after the sales tax holiday period.

Shipping and Handling: When shipping and handling charges are part of the sales price of an item, and multiple items are shipped on a single invoice or receipt, the shipping and handling charge must be apportioned to each item on the invoice or receipt to determine if an item is exempt during the sales tax holiday.

Recordkeeping: Sales of eligible items sold during the sales tax holiday period should be reported as exempt sales on your sales tax return.

Qualified Businesses May Choose Not to Participate in the Back-to-School Sales Tax: Holiday Qualified businesses may choose not to participate in the sales tax holiday when less than five percent (5%) of their gross sales of tangible personal property during calendar year 2016 were sales of items that would be exempt during the sales tax holiday period. Businesses with multiple locations must include the gross sales of all their Florida locations in this calculation. For businesses that were not in operation during the 2016 calendar year, this option is available when less than five percent (5%) of the business’s inventory of items for sale are items that would be tax exempt during the sales tax holiday.

  • Qualifying businesses choosing not to participate in the sales tax holiday must send a written notice to the Department by August 1, 2017. The notice must be on business letterhead and state that the business meets the qualifications stated above and has chosen not to participate in the sales tax holiday. The notice must be signed by an individual authorized to sign on behalf of the business. Businesses with multiple locations may send a single notice stating that all their Florida locations will not participate in the sales tax holiday.
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Clothing and Accessories

The following is a list of clothing and accessory items and their taxable status during the back-to-school sales tax holiday period. No tax is due on the sale or purchase of any article of clothing, wallet, or bag, including handbags, backpacks, fanny packs, and diaper bags, but excluding briefcases, suitcases, and other garment bags, with a selling price of $60 or less per item. (The list is not all-inclusive.)

  • “Clothing” means any article of wearing apparel, including all footwear (except skis, swim fins, roller blades, and skates) intended to be worn on or about the human body. Clothing does not include watches, watchbands, jewelry, umbrellas, or handkerchiefs. This exemption does not apply to sales of clothing, wallets, or bags in a theme park, entertainment complex, public lodging establishment, or airport.
  • Accessories » Barrettes and bobby pins » Belt buckles » Bow ties » Hairnets, bows, clips, and hairbands » Handbags » Neckwear » Ponytail holders » Scarves » Ties » Wallets
  • Aerobic and fitness clothing
  • Aprons and clothing shields
  • Athletic supporters
  • Baby clothes
  • Backpacks and book bags
  • Bandanas
  • Baseball cleats
  • Bathing suits, caps, and cover-ups
  • Belts
  • Bibs
  • Bicycle helmets (youth)**
  • Blouses
  • Boots (except ski or fishing boots)
  • Bowling shoes (purchased)
  • Braces and supports worn to correct or alleviate a physical incapacity or injury*
  • Bras
  • Choir and altar clothing*
  • Cleated and spiked shoes
  • Clerical vestments*
  • Coats
  • Coin purses
  • Costumes
  • Coveralls
  • Diaper bags
  • Diapers, diaper inserts (adult and baby, cloth or disposable)
  • Dresses
  • Fanny packs
  • Fishing vests (nonflotation)
  • Formal clothing (purchased)
    • Gloves » Dress » Garden » Leather » Work
  • Graduation caps and gowns
  • Gym suits and uniforms
  • Hats and caps
  • Hosiery and panty hose (including support hosiery)
  • Hunting vests
  • Jackets
  • Jeans
  • Lab coats
  • Leggings, tights, and leg warmers
  • Leotards
  • Lingerie
  • Martial arts attire
  • Overshoes and rubber shoes
  • Pants
  • Purses
  • Raincoats, rain hats, and ponchos
  • Receiving blankets
  • Religious clothing*
  • Robes
  • Safety clothing
  • Safety shoes
  • Scout uniforms
  • Shawls and wraps
  • Shirts
  • Shoe inserts and insoles
  • Shoes (including athletic)
  • Shoulder pads (e.g., dresses or jackets)
  • Shorts
  • Ski suits (snow)
  • Skirts
  • Sleepwear (nightgowns and pajamas)
  • Slippers
  • Slips
  • Socks
  • Suits, slacks, and jackets
  • Suspenders
  • Sweatbands
  • Sweaters
  • Swim suits and trunks
  • Ties (neckties – bow ties)
  • Tuxedos (purchased)
  • Underclothes
  • Uniforms (work, school, and athletic – excluding pads)
  • Vests

* These items are always exempt as religious, prescription, prosthetic, or orthopedic items. ** Bicycle helmets marketed for use by youth are exempt from sales tax. E

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2017 Florida Back-to-School Sales Tax Holiday

Frequently Asked Questions – Sales and Use Tax Dealers

 

 

  1. What happens during the 2017 Back-to-School Sales Tax Holiday?

During the 2017 Back-to-School Sales Tax Holiday, certain clothing, footwear, and accessories selling for $60 or less per item, certain school supplies selling for $15 or less per item, and personal computers and certain related accessories selling for $750 or less per item are exempt from sales tax. The holiday period begins at 12:01 a.m. on Friday, August 4, 2017, and ends at 11:59 p.m. on Sunday, August 6, 2017. A list of items exempt from tax during the holiday period is provided in Tax Information Publication (TIP) No. 17A0107.

 

  1. If a personal computer for home use sells for more than $750, is the first $750 exempt during the sales tax holiday? What about clothing, footwear, and accessories and school supplies? The exemption is based on the sales price of each item. An item sold during the holiday period only qualifies as an exempt item if it meets the sales price criteria. Each qualifying personal computer must have a sales price of $750 or less. Clothing, footwear, and accessories qualifying for the exemption must have a sales price of $60 or less, and school supplies must have a sales price of $15 or less.

 

  1. Is there a limit on the number of items that can be sold exempt during the sales tax holiday? The exemption is based on the sales price of each item.

 

  1. If a package or set of items contains both taxable items and items exempt during the sales tax holiday, is the package or set exempt during the holiday period?

No. Items that are tax exempt must be sold as separate items during the holiday period to qualify for the exemption.

 

  1. Are businesses responsible for correctly exempting qualifying items during the sales tax holiday?

Yes. You are responsible for correctly exempting qualifying items during the holiday period. If you have a question about a specific item that is not listed in TIP No. 17A01-07, contact the Department at 800-352-3671.

 

  1. Is my business required to participate in the 2017 Back-to-School Sales Tax Holiday?

Businesses that sell a small number of the items qualifying for the back-to-school sales tax holiday are permitted to “opt out” of participation in the holiday.  Businesses eligible to “opt out” must:

  • have less than 5% of their gross sales during calendar year 2016 be from sales of items that would be exempt if they were sold during the 2017 Back-to-School Sales Tax Holiday,
  • notify the Department of Revenue in writing by August 1, 2017, and
  • post a notice that they are “opting out” of the sales tax holiday in a conspicuous place at the business location.

 

For more information on the notice requirements and how to send the notice to the Department, see TIP No. 17A0107.

 

 

  1. Do I need to change my accounting system to show the temporary exemptions?

No. Your accounting system should adequately identify all items sold that are exempt from tax during this sales tax holiday.

 

Refunds/Exchanges

 

  1. What should I do if I mistakenly collect tax on an item that should be exempt from tax during the sales tax holiday?

You should refund the tax to your customer(s). If the tax cannot be refunded, you must report and pay the tax to the Department.

 

  1. What if a customer comes back after the sales tax holiday for a refund of the tax they paid, but I have already remitted the tax to the Department?

You should refund the tax to your customer. You may take a credit on your next sales and use tax return for the tax refunded to the customer.

 

  1. A customer returns an item that was purchased before the sales tax holiday period and exchanges it for another item during the holiday period. The new item is exempt from tax during the holiday period.  Do I give the customer a tax refund?

Yes. You must have documentation (e.g., receipts or invoices) showing that tax was paid on the item at the time of the original purchase.

 

  1. If a customer returns a qualifying exempt item and is given an item of equal price after the sales tax holiday period, is sales tax due on the new item?

If a customer buys an item exempt from tax during the tax holiday period and exchanges it for the same type of item (e.g., different size or different color) after the holiday period expires, no tax is due.

If a customer buys an item that is exempt from tax during the tax holiday period and returns the item after the holiday period and gets a different type of item, sales tax will apply to the new purchase even if it is the same price.

 

Coupons, Discounts, and Rebates

 

  1. Why does a store discount coupon reduce the sales price of an eligible item, but a manufacturer’s coupon or rebate does not?

The sales price of an item includes all consideration received by the retail seller for that item. The price of an item is not limited to the amount paid by a customer. A coupon, discount, or rebate offered by the retail seller reduces the sales price of an item because it reduces the total amount received by the retail seller for the item.

When a retail seller is reimbursed for the amount of any discount created by a manufacturer’s coupon, discount, or rebate, the amount of the reimbursement is included in the taxable sales price of the item.

Manufacturer’s coupon example: During the sales tax holiday period, a jacket sells for $65. The customer uses a $10 manufacturer’s coupon when purchasing the jacket. Although the customer pays $55 for the jacket, the retail seller’s sales price remains $65 because the  seller will receive a total of $65 for the item: $55 from the customer and $10 from the manufacturer. The jacket does not qualify for the exemption during the holiday period (the price of the jacket is more than $60).

Manufacturer’s rebate example: During the sales tax holiday period, a package of school supplies containing pens, mechanical pencils, and highlighters sells for $20. The manufacturer is offering a $5 instant rebate that is redeemed when a package of school supplies is purchased from the retail seller. Although the purchaser pays $15, the retail seller’s sales price remains $20 because the seller will receive a total of $20 for the item: $15 from the purchaser and $5 from the manufacturer. The package of school supplies does not qualify for the exemption (the price of the item is more than $15).

Store discount coupon example: During the sales tax holiday period, a personal computer for home use sells for $800. The retail seller is offering a 10% discount. After applying the 10% discount, the discounted sales price for the computer is $720. The computer is exempt (the sales price is $750 or less).

 

Gift Cards

 

  1. If a gift card is purchased during a sales tax holiday, can the customer purchase a qualifying item tax exempt after the sales tax holiday ends?

No. The purchase of the eligible item must be made during the holiday period to be tax exempt. However, when eligible items are purchased during the holiday period using a gift card, the eligible items qualify for the exemption; it does not matter when the gift card was purchased.

 

Rain Checks

 

  1. If a rain check is issued during the sales tax holiday, can it be used after the holiday to purchase the item tax exempt?

No. The purchase of the eligible item must be made during the holiday period to be tax exempt. When a rain check is issued, a sale has not occurred. The sale occurs when the rain check is redeemed and the item is purchased.

 

Layaway Sales

 

  1. Are items placed on layaway eligible for the tax exemption during a sales tax holiday?

Yes. A layaway is when an item is set aside for a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and receives the merchandise at the end of the payment period. Eligible items placed on layaway during a holiday period are tax exempt, even if final payment of the layaway is made after the holiday period. If a customer makes a final payment and takes delivery of the items during the holiday period, the eligible items are tax exempt.

 

Mail-Order, Catalog, or Internet Sales

 

  1. Do the exemptions during a sales tax holiday apply to mail-order, catalog, or Internet sales? All mail-order, catalog, or Internet sales of eligible items during the holiday are tax exempt when the order is accepted during the holiday period for immediate shipment, even if delivery is made after the holiday period.

 

An order is accepted by the mail-order company when action has been taken to fill the order for immediate shipment. Actions to fill an order include assigning an “order number” to a telephone order, confirming an Internet order by an email to the customer, or placing a date received on an order received by mail.

 

An order is considered an immediate shipment when delayed shipment is not requested by the customer. An order is an immediate shipment even if the shipment may be delayed because of a backlog of orders or stock is currently unavailable or on back order.

 

  1. What do I do about shipping charges for the items purchased by mail-order or through a catalog or the Internet?

Shipping charges separately stated on a customer’s invoice are part of the sales price of each item listed on the sales invoice. You must proportionately allocate the shipping charges between the items ordered. The amount of each item is divided by the total amount of all the items ordered to obtain the percentage that each item bears to the total order. Then multiply the total shipping charge by the percentage for each item to determine the amount of the shipping charge applicable to each item.

 

A customer orders a $60 jacket and a $36 dress, for a total of $96 during the sales tax holiday period. The shipping charge is $10.

Jacket — Cost of jacket/total cost: $60 / $96 = 62.5%; Shipping charge for jacket: 62.5% × $10 = $6.25 o             Total sales price for the jacket:  $60 + $6.25 = $66.25 + tax

 

Dress — Cost of dress/total cost: $36 / $96 = 37.5%; Shipping charge for dress: 37.5% × $10 = $3.75 o             Total sales price for the dress:  $36 + $3.75 = $39.75

The dress qualifies for the exemption. The jacket is now more than $60 with the shipping charge included and no longer qualifies for the exemption.

 

 

Records and Reporting

 

  1. Do I need to account for exempt sales during a sales tax holiday differently than other taxexempt sales?

No. There are no additional record-keeping requirements.

 

Merchant’s License or Other Fees (Two Cities in Bay County Only)

 

  1. How do I handle the 1% merchant’s license fee (sometimes referred to as a gross receipts fee) in Panama City or Panama City Beach during a sales tax holiday?

When stores located in these two cities charge customers the 1% fee, it is part of the sales price subject to sales tax, even when the fee is separately stated on a receipt or invoice. When the sales price of the item, plus the 1% merchant’s license fee, makes the total sales price above the peritem price limitation to qualify for exemption during the holiday period, the item does not qualify for the exemption.

         Example of Item Sold in Panama City

Price of backpack                   $60.00

1% merchant’s license fee   + $0.60 Taxable value of backpack    $60.60

The backpack is more than $60 and does not qualify for the exemption.

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Florida’s 2017 Back-To-School Sales Tax Holiday:
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Florida’s 2017 Back-To-School Sales Tax Holiday:
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Florida’s back-to-school sales tax holiday is right around the corner. Patch has the details you need to know to cash in on the savings.
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