Frequently Asked Questions - Sales Tax Holiday
Consumer Related Questions:
- What is the sales tax holiday?
- When is the sales tax holiday?
- Where can I read the contents of the relevant statute?
- What items qualify for the sales tax holiday?
- Are there price limits on the qualifying items?
- Can a local jurisdiction choose not to participate in the sales tax holiday?
- I am a teacher and I usually buy supplies for my classroom with my own money. Does that qualify as personal use?
Business Related Questions
- I don't sell very many items that qualify for the sales tax holiday. Do I have to participate in the sales tax holiday?
- What if I do not sell any of the qualified items for the Sales Tax Holiday?
- How do I collect and report the tax if one or more of the local jurisdictions in which my business resides chooses to not participate in the sales tax holiday?
- Can I use normal pre-printed voucher to file my sales tax that I collected during the sales tax holiday?
- What if I have not received a sales tax holiday return in the mail?
- I only sell a few items that would be considered school supplies. Do I have to reprogram all of my cash registers for the lower tax rate?
- Would I be able to purchase a new computer tax-exempt during the sales tax holiday for my business?
What is the sales tax holiday?
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.
When is the sales tax holiday?
The sales tax holiday starts at 12:01 a.m. the first Friday in August and ending at midnight on the Sunday following. In 2007, the sales tax holiday is August 3, 2007, and ends at midnight, August 5, 2007.
Where can I read the contents of the relevant statute?
The relevant statute can be found on the Missouri House website. Click here to read the contents of House Bill 64.
What items qualify for the sales tax holiday?
Specifically, the statute exempts clothing, personal computers, and school supplies defined as follows:
- “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.
- “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, 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, back packs, 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.
Are there price limits on the qualifying items?
Yes. An article of clothing cannot exceed a taxable value of one hundred dollars. School supplies are not to exceed fifty dollars per purchase. Computer software cannot exceed a taxable value of three hundred fifty dollars, and personal computers or computer peripheral devices cannot exceed three thousand five hundred dollars.
Can a local jurisdiction choose not to participate in the sales tax holiday?
For sales tax holidays beginning with the 2006 sales tax holiday, any political subdivision could choose to prohibit future annual sales tax holidays from applying to its local sales tax. If the jurisdiction previously chose not to participate, it could also adopt an ordinance to participate in a future sales tax holiday. The local jurisdiction must notify the department if it changes its option to participate in the sales tax holiday. The ordinance can be mailed to the Missouri Department of Revenue at P.O. Box 3380, Jefferson City, MO 65105-3380 or faxed to (573) 522-1160. For the 2007 holiday, the deadline to notify the department is June 20, 2007.
I am a teacher and I usually buy supplies for my classroom with my own money. Does that qualify as personal use?
Yes, the sales tax holiday exemption applies to these purchases as long as you are using your own funds.
I don't sell very many items that qualify for the sales tax holiday. Do I have to participate in the sales tax holiday?
The statute provides an alternative for retailers when less than two percent of their merchandise offered for sale qualifies for the sales tax holiday. The sales tax holiday doesn't apply to those retailers, but they must offer a refund of tax to customers who purchase qualifying sales tax holiday related items.
What if I do not sell any of the qualified items for the sales tax holiday?
If you do not sell any of the qualified items, you will collect and remit sales tax as usual.
How do I collect and report the tax if one or more of the local jurisdictions in which my business resides chooses to not participate in the sales tax holiday?
You will collect from your customers only the local jurisdiction’s sales tax on the sale of holiday related items. You do not collect state sales tax on the sale of holiday related items. Report holiday sales on a separate line for each business location. See Example 1.
Can I use normal pre-printed voucher to file my sales tax that I collected during the sales tax holiday?
If your city, county, and taxing district are all participating in the sales tax holiday, you may use your pre-printed voucher. Report sales of holiday related items as a negative adjustment on your return. See Example 2.
What if I have not received a sales tax holiday return in the mail?
If you have not received a sales tax holiday return, you can download a blank sales tax return (Form 53-1
). Report sales made on holiday related items during the sales tax holiday on a separate line from all other sales you made for each location during the tax period. For examples on how to fill out a blank sales tax return click here.
I only sell a few items that would be considered school supplies. Do I have to reprogram all of my cash registers for the lower tax rate?
No, if less than two percent of your merchandise offered qualifies for the holiday rate you do not have to participate in the holiday. However, you must provide a refund of the applicable tax to the customer on their purchase of qualifying sales tax holiday items.
Would I be able to purchase a new computer tax-exempt during the sales tax holiday for my business?
No, the sales tax holiday is for purchases of qualifying items for personal use only.
For questions regarding the sales tax holiday email us at: salesuse@dor.mo.gov