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Tax-Free School Shopping: Four States Are Still Open | Brett Sifling, CFP®, CEPA®

Writer: Brett Sifling, CFP® CEPA®
Brett Sifling, CFP® CEPA®
Aug 13
7 min read
Back to School Shopping

By: Brett Sifling, CFP®, CEPA®


Every August, a handful of states briefly stop collecting sales tax on the things families buy for school. That's a sales tax holiday. For a few days, the state waives its sales tax on specific categories (clothing, shoes, supplies, sometimes computers) almost always with a price cap on each item. Buy a $90 pair of shoes during the window and you skip the tax entirely. Buy a $110 pair and you don't.


They're a newer invention than you'd guess, and they weren't built for families. New York ran the first modern one in January 1997 for an unsentimental reason: New Yorkers were driving to New Jersey, where clothing wasn't taxed, and Albany wanted them shopping at home. Florida copied the idea in 1998, Texas in 1999, and about twenty states now run some version every year. New York eventually dropped the theatrics and made its clothing exemption permanent instead.


We're writing about this for two reasons.


The first is practical. Twenty states held a holiday this year and most have already closed. The four still standing have hard deadlines inside the next several days, and the rules are considerably fussier than the "TAX FREE!" signage in the window suggests. If you're in one of those states, this is a this-week problem.


The second matters more. A sales tax holiday is a small break, loudly advertised. Meanwhile a far larger education tax break changed this year, and almost nobody noticed. That gap, between the savings that get a banner and the savings that get a footnote, is most of what we do for clients. This is a tidy little example of it.


Who's still open

If you're in one of these four, here's your deadline:


  • Florida — through Thursday, August 20

  • Maryland — through Saturday, August 15

  • Illinois — through Sunday, August 16

  • Connecticut — Sunday, August 16 through Saturday, August 22


Everything else is finished for the year: Texas, Ohio, Virginia, South Carolina, Oklahoma, Missouri, Iowa, Massachusetts, Arkansas, Tennessee, New Mexico, West Virginia, Mississippi, and Alabama.


First, the thing most people get wrong


The biggest line in your back-to-school budget is electronics. The National Retail Federation puts it at $293.11 per household this year, more than clothing ($250.29), more than shoes ($174.01), more than school supplies ($146.45).


Electronics are also the category most of these holidays refuse to cover.


Maryland leaves them out. Illinois specifically excludes computers, printers, and electronics. Of the four states still open, only Florida covers computers up to $1,500, and only for personal rather than business use.


On a $1,200 laptop in Florida, that's $72 in state sales tax you don't pay, plus the county surtax on top. One purchase, and you've saved more than a full week of tax-free T-shirts.

So if there's a laptop or tablet on the list and you're in Florida, that's the trip worth making. Everywhere else, adjust your expectations accordingly.


What each state actually covers


Florida (through Aug. 20) — the longest and broadest window in the country at 32 days. Clothing, shoes, backpacks, and bags at $100 or less per item. School supplies at $50 or less. Learning aids and jigsaw puzzles at $30 or less. Computers and accessories at $1,500 or less. Florida drops both the 6% state rate and the county surtax, so qualifying items ring up at zero. One quirk: the exemption doesn't apply inside theme parks, hotels, entertainment complexes, or airports.


Maryland (through Aug. 15) — clothing and shoes at $100 or less per item, plus the first $40 of a backpack. No school supplies. No electronics. Accessories don't count either, so jewelry, watches, handbags, umbrellas, scarves, and ties are all still taxed.


Illinois (through Aug. 16) — the one the headlines keep getting wrong. Illinois isn't waiving sales tax. It's cutting the state's share from 6.25% to 1.25% and leaving every local tax in place. In Chicago, you'll pay 5.25% instead of 10.25%. A real discount, just not a free one. Clothing and shoes under $125 per item qualify, school supplies have no price cap, and computers and electronics are out entirely.


Connecticut (Aug. 16–22) — clothing and shoes under $300 per item, up from $100 last year. That's the most generous threshold in the country. If you need something pricier than a T-shirt, this is the week genuinely worth planning around.


Five things that quietly cost people money


1. Caps are per item, not per receipt. Six $90 shirts in Maryland all qualify. Your total doesn't matter.


2. One dollar over the cap kills the whole thing. A $101 jacket in Maryland gets taxed on the full $101, not on the dollar above the line. Connecticut works the same way: a $350 jacket is taxed on all $350.


3. Coupon rules aren't the same everywhere. In Connecticut, a store coupon that brings a $320 jacket under $300 makes it exempt. In Illinois, a coupon that drops an item under $125 does not. Maryland requires the coupon come from the store, not the manufacturer. Rebates never help, because they're applied after the sale.


4. Don't drive to another state for this. If you buy tax-free elsewhere and bring it home to use, you owe use tax in your own state. Almost nobody pays it, but the obligation is real, and the gas will cost you more than you save on a backpack.


5. Watch the price, not just the tax. These holidays squeeze a lot of demand into a few days on a predictable list of products, which gives stores room to hold their prices firm. Research cited by the Tax Foundation suggests sellers can absorb up to 20% of the benefit through price increases. A 6% break on a marked-up item isn't a discount. The caps carry their own trap, too: they nudge you toward the cheaper version of the thing you actually wanted.


If your state doesn't have one


California, New York, Pennsylvania, Arizona, Colorado, Michigan, Minnesota, North Carolina, and Wisconsin don't run these at all. New Jersey repealed its holiday for good. Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax to begin with.

Two states handle clothing year-round instead, which beats a single week:


  • Pennsylvania doesn't tax most clothing at any point in the calendar.

  • New York exempts clothing and shoes under $110 per item from the state's 4% sales tax all year long. Local tax still applies unless your county or city opted into the exemption — New York City did, so under $110 is completely tax-free there. The state's Publication 718-C lists which localities participate.


The break worth more than all of it


Here's the honest math. Clothing and shoes run about $424 for the average family. At 6%, a tax holiday saves you roughly $25.


Worth having. Not worth rearranging your week for. If you want a tax break that actually moves the needle, look at these three instead.


529 plans just got much more useful for K–12. As of this tax year, you can withdraw up to $20,000 per child per year tax-free for K–12 expenses, double the old $10,000 limit. And since July 2025, qualifying expenses reach well beyond tuition: textbooks and curriculum materials, online instructional materials, outside tutoring (the tutor has to be unrelated to your child and meet specific credential rules), SAT and ACT fees, AP and dual-enrollment fees, and educational therapies for kids with disabilities from a licensed provider.

One important catch. That's federal law, and not every state has matched it. A withdrawal that's federally tax-free can still get taxed on your state return. Check with your tax preparer before pulling money out for K–12, especially for the newer categories.


Your state may pay you to contribute. More than 30 states plus D.C. offer a state income tax deduction or credit for 529 contributions. Depending on where you live and how much you put in, that's worth hundreds of dollars every year, not one week in August. A few states let you claim it on any state's plan, not just their own. Several income-tax states, California and North Carolina among them, offer nothing at all, so it's worth knowing which camp you're in.

If you teach, don't miss this one. The educator expense deduction is $350 for 2026, up from $300, and $700 on a joint return when both spouses are eligible educators. New this year, there's also a separate itemized deduction for classroom expenses with no dollar cap, you just can't run the same expense through both. It covers teachers, instructors, counselors, principals, and aides working at least 900 hours in a K–12 school. Coaches were added for 2026.


Bottom line

Use the tax holiday if your state has one and you were shopping anyway. Buy the laptop in Florida. Skip the road trip. And don't let a $100 cap talk you into the backpack that falls apart in November.


Then put one date on the calendar that isn't in August: your state's year-end 529 contribution deadline. That's the one worth real money.


Sources


State rules


  • Florida Department of Revenue, Tax Information Publication No. 26A01-11, 2026 Back-to-School Sales Tax Holiday (issued July 1, 2026); Rule 12A-1.117, F.A.C.

  • Comptroller of Maryland, Shop Maryland Tax-Free Week program guidance and FAQ

  • Illinois Department of Revenue, Informational Bulletin FY 2026-30; Public Act 104-0468

  • Connecticut Department of Revenue Services, Sales Tax Free Week — portal.ct.gov/drs/sales-tax/sales-tax-free-week

  • New York State Department of Taxation and Finance, Clothing and Footwear Exemption, Tax Bulletin ST-122 and Publication 718-C — tax.ny.gov/bus/st/sales_tax_clothing_exemption.htm


Multi-state comparisons



History and background



Spending data



Federal tax provisions


  • One Big Beautiful Bill Act (enacted July 4, 2025), amendments to IRC §529

  • Educator expense deduction, IRC §62(a)(2)(D) 


Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at: http://www.adviserinfo.sec.gov .


Brett Sifling is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 06/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."

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