Back to School Sales Tax Holiday - Information for Vendors
Section 144.049, RSMo, establishes a sales tax holiday during a three-day period beginning at 12:01 a.m. on the first Friday in August and ending at midnight on the Sunday following. Certain back-to-school purchases, such as clothing, school supplies, computers, and other items as defined by the statute, are exempt from sales tax for this time period only.
The sales tax holiday applies to state and local sales taxes when a local jurisdiction chooses to participate in the holiday. However, local jurisdictions can choose to not participate in the holiday if they enact an ordinance to not participate and notify the department 45 days prior to the sales tax holiday. If the jurisdiction had previously enacted an ordinance to not participate in the holiday and later decided to participate, it must enact a new ordinance to participate and notify the department 45 days prior to the sales tax holiday.
If one or all of the local taxing jurisdictions in which your business is located is not participating in the sales tax holiday, the state's portion of the tax rate (4.225%) will remain exempt for the sale of qualifying sales tax holiday items. The Department of Revenue will notify you of the proper tax rate to collect.
Filing Your Return for the Sales Tax Holiday Period
- Businesses within a local jurisdiction that is not participating in the sales tax holiday, will receive a long form Sales Tax Return (Form 53-1). (The return will replace the normal filing method for this period.) All sales made at the full tax rate must be indicated on one line, while all holiday related sales taxed by each municipality will be treated as an item tax, with a reduced rate, on a separate line. See Example 1.
- Businesses within a local jurisdiction that is participating in the sales tax holiday may continue to use the normal filing method for this period. Enter total gross receipts for all sales made, indicating holiday sales as a negative adjustment on the return. See Example 2.
- The sales tax holiday may not apply to any retailer when less than two percent of the retailer's merchandise offered for sale qualifies for the sales tax holiday. However, the retailer must provide the taxpayer a refund of the sales tax paid if the customer requests one.
- All businesses that do not sell qualifying items may continue to use the normal filing method or voucher filing for this period.
For questions regarding the sales tax holiday, please email us at: [email protected]
Below is an example of how the return should appear if one or more of your local taxing authorities does not participate in the sales tax holiday.
Total sales for the tax period were $3000. Of the $3000, $1000 was received for qualifying school supplies. Because the local taxing authorities are not participating in the holiday, the tax rate applied against the $1000 in sales is 2%. (The normal tax rate for the area in this example is 6.225%, of which 4.225% is the state tax rate. In order to find the reduced rate the customer should be charged, use the following formula: 6.225 – 4.225 = 2.000%.) Even though the local taxing authority is not participating, the customer still receives an exemption from the state tax rate.
|BUSINESS LOCATION||CODE||GROSS RECEIPTS||ADJUSTMENTS(+ OR -)||TAXABLE SALES||RATE (%)||AMOUNT OF TAX|
|123 Main Street||-||$2000.00||-||$2000.00||6.225||$124.50|
* Holiday Sales
Below is an example of how the return will appear if all local taxing authorities are participating in the sales tax holiday.
Total sales for the month were $3000. Of the $3000, $1000 was received for qualifying school supplies. Because the local taxing authority is participating in the holiday, the holiday sales are completely exempt from tax. The customer will receive an exemption from both state and local tax for this time period.
|BUSINESS LOCATION||CODE||GROSS RECEIPTS||ADJUSTMENTS (+ OR -)||TAXABLE SALES||RATE (%)||AMOUNT OF TAX|
|123 Main Street||-||$3000.00||-$1000.00||$2000.00||6.225||$124.50|
The sales tax exemption is limited to:
- Clothing – any article having a taxable value of $100 or less
- School supplies – not to exceed $50 per purchase
- Computer software – taxable value of $350 or less
- Personal computers – not to exceed $3,500
- Computer peripheral devices – not to exceed $3,500
The following are definitions of the items that would be exempt during the Sales Tax Holiday as described in Section 144.049, RSMo.
“Clothing” - any article of wearing apparel, including footwear, intended to be worn on or about the human body. The term shall include but not be limited to cloth and other material used to make school uniforms or other school clothing. Items normally sold in pairs shall not be separated to qualify for the exemption. The term shall not include watches, watchbands, jewelry, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, or belt buckles; and
“Personal computers” - a laptop, desktop, or tower computer system which consists of a central processing unit, random access memory, a storage drive, a display monitor, and a keyboard and devices designed for use in conjunction with a personal computer, such as a disk drive, memory module, compact disk drive, daughterboard, digitalizer, microphone, modem, motherboard, mouse, multimedia speaker, printer, scanner, single-user hardware, single-user operating system, soundcard, or video card;
“School supplies” - any item normally used by students in a standard classroom for educational purposes, including but not limited to, textbooks, notebooks, paper, writing instruments, crayons, art supplies, rulers, book bags, backpacks, handheld calculators, chalk, maps, and globes. The term shall not include watches, radios, CD players, headphones, sporting equipment, portable or desktop telephones, copiers or other office equipment, furniture, or fixtures. School supplies shall also include computer software having a taxable value of three hundred fifty dollars or less.