Customers love sales tax holidays, but for ecommerce businesses, they can pose a challenge. This year, several US states will offer the sales tax holiday 2025. And since each state has its own rules, it’s important to know your obligations during these periods.
Track your sales tax holidays in 2025 better. We created this quick, comprehensive guide for every sales tax holiday in each state this year to help you stay updated and on track.
What is a Sales Tax Holiday?
A sales tax holiday is a period where the state or local government temporarily exempts qualifying items from sales tax to provide relief to customers. The state government announces sales tax holidays to boost economic activities and promote growth in the US.
Since most sales tax holidays are on weekends, they are also known as tax-free weekends. The following are the common types of sales tax holidays across the states.
- Back-to-School: To help parents prepare for the beginning of the school year, many states offer sales tax exemptions on specific school-related items such as clothes, shoes, school supplies, and computers in August.
- Emergency Preparedness: These holidays are more common in Southern states and allow people to prepare for emergencies during extreme weather conditions.
- Energy Star Appliance: This holiday encourages people to reduce their consumption of energy resources by purchasing tax-exempt energy-efficient appliances.
Sales tax collection and remittance can go two ways:
- The seller is responsible for the sales tax collection
- The buyer is liable to pay the sales tax
During a tax-free weekend, the buyers are not liable for paying sales tax on particular taxable transactions, and the sellers are prohibited from collecting it. Learn more about ecommerce sales tax to understand the compliance requirements during sales tax holidays.
For example, let’s look at how sales tax holidays work for a retail business.
A clothing store in Texas typically collects sales tax from customers and remits it to the state government. The funds collected from sales tax will be used for various public development projects by the state government. Texas has an annual back-to-school holiday around August 8-10. During those days, the company will not collect sales tax on qualifying clothing items costing less than $100.
Sales Tax Holidays 2025 State-By-State Schedule
Besides the five states with no sales tax, around 18 states offer one or more sales tax holidays and tax-free weekends. Below is a state-by-state guide schedule to sales tax holidays in 2025. Note: Bookmark this blog to help you keep track of the sales tax holidays in 2025. We will update this table throughout the year to include new sales tax holidays announced by states.
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Sales Tax Holiday 2025 Frequently Asked Questions
What states offer Sales Tax Holidays for specific items only?
In 2025, only a few states with statewide sales tax are offering sales tax holidays for specific items. States like Alabama, Massachusetts, Mississippi, and Missouri are among those that have announced sales tax holidays. These holidays typically cover school supplies, clothing, and emergency preparedness items.
How should ecommerce businesses ensure compliance during Sales Tax Holidays?
To avoid overcharging customers, ecommerce businesses must ensure that sales tax collection is turned off for products eligible for sales tax holidays. If a business fails to turn off sales tax collection during sales tax holidays, they may face legal consequences and penalties.
Instead of managing sales tax manually, businesses can use reliable sales tax solutions like TaxHero to handle tax holidays efficiently and enhance compliance.
What products are included in tax-free weekends?
Every state has its own rules and regulations for declaring tax-exempt products during tax-free weekends. Usually, the products included in sales tax holidays are back-to-school supplies, disaster preparedness-related items, energy-efficient products, and ammunition.
When are tax-free weekends in 2025?
Tax-free weekends are announced in various states at any time throughout the year. Sometimes, the states may expand existing tax-free weekends to benefit citizens. The states may also suspend tax-free weekends when tight on budget. Refer to the schedules we shared above to learn about tax-free weekends occurring in 2025.
Do Sales Tax Holidays have price restrictions?
Yes, sales tax holidays may have some price restrictions, but they are not mandatory. Some states don’t set a price cap on products during sales tax holidays, and others might. Our schedule for sales tax holidays in 2025 includes price restrictions on certain items as announced by each state.
Streamline your holiday sales tax with TaxHero today!
Sales tax rules and regulations change frequently in all states. As an ecommerce business, you must track sales during sales tax holidays to ensure prompt compliance. Automate your sales tax compliance with TaxHero to avoid any legal penalties. Book a call to learn how we can help your business.