The Ultimate Guide for Sales Tax on Clothing

Businesses dealing in clothing, whether online or not, are bound to ask the question: What is clothing sales tax?

Sales tax on clothes differs because some states exempt them to a certain degree, although they are tangible personal property. Some states categorize clothes as a necessity and, therefore, fully or partially exempt them from sales tax. For both sellers and consumers, understanding sales tax on clothes and its applicable exemptions is essential and advantageous.

After all, sales tax on clothes varies across states. Some states exempt them to a certain degree. Meanwhile, other states categorize clothes as a necessity and, therefore, fully or partially exempt them from sales tax. With the complexity of clothing taxability, there are numerous specific rules and restrictions to digest. In this guide, we’ve made everything easy for your mind to consume.

Find out which clothes are taxed, the sales tax rate for clothing in each state, and which states exempt sales tax on clothing.

Key Takeaways

• Most basic clothing items that are deemed necessary for daily use are generally exempt from sales tax in many states. However, the exemption can be limited, partial, or full.
• Luxury apparel, such as jewelry, designer bags, and expensive clothing lines are commonly subject to sales tax or “luxury tax” in various states.
• A few states offer limited exemptions on the sale of clothing, typically during their state-mandated sales tax holidays.
• Online retailers are still required to collect once they establish a nexus in a taxing state, and they are selling a taxable product.
• Discounted clothing can be subject to taxation, depending on the state’s rules.

What is Clothing Sales Tax?

Clothing sales tax is the tax applied to the sales of taxable clothing and specific apparel. It’s important to know that some states apply sales tax to clothes and some don’t. Depending on the state’s unique rules, the taxability of certain clothes can also vary.

This means that the application of sales tax depends on the state where you are buying or selling. For businesses, it’s crucial to know which clothing items are subject to sales tax and which are not.

Which Clothing are Subject to Sales Tax?

As mentioned above, every state has different rules when it comes to the taxability of tangible products like clothing. So, how can you tell if clothing is subject to sales tax or not? Despite the varying definitions across states, clothing items are generally recognized as either: 

• Luxuries or
• Necessities

Typically, most states apply tax on luxury clothing, but not on necessities. However, in some cases, states set a price threshold to determine when sales tax is applied to clothing items.

For example, in New York, clothing and footwear are exempt from sales tax as long as the purchase is under $110. However, if the total sales price exceeds $110, then the entire transaction becomes taxable.

Luxury Apparel vs Essential Clothing

To further differentiate how to identify which clothing is taxable or not, understanding the difference between luxuries and necessities is a required step.

• Luxury Apparel – applies to items that are generally not purchased for everyday use, such as expensive designer clothes and accessories, or garments made from fur
• Essential Clothing – applies to items that are typically purchased for essential daily use, such as casual attire and undergarments that are frequently bought at affordable prices

Items that are recognized as luxuries are often subject to sales tax. Meanwhile, goods that are seen as necessities are typically exempt or taxed at a discounted rate.

But once again, the taxability of clothing still primarily varies across states.

Examples of Taxable vs Non-taxable Clothing in the U.S

Familiarizing yourself with standard clothing categories helps you identify which clothing items are commonly taxable or non-taxable. For instance, most states classify clothing under accessories, formal attire, or sports wear.

Taxable clothing examples: 

• Accessories: Items like jewelry, non-medically prescribed eyewear, fashionable hats, and designer handbags.
• Fur garments: States that still allow manufacturing fur clothing often subject fur clothing to sales tax, even if the clothing type is exempt. As long as the item is made with fur, it typically overrides the initial sales tax exemptions.
• Formal attire: Generally, clothing such as evening gowns or dresses, tuxedos, and other formal outfits tend to be subject to sales tax, regardless of whether the item is purchased or rented.
• Protective gear: Safety goggles, sturdy hats, and work gloves are usually taxable.
• Sports equipment: Athletic items such as arm bands, protective pads, performance fabrics, helmets, and the like are often taxable. However, some states may offer an exemption to sports wear if the state is encouraging athletic activities. 

Tax-exempt clothing examples:

• Uniforms: Since uniforms are often worn daily, they are recognized as necessities. Therefore, this type of clothing is typically exempt from sales tax in many states.
• Religious attire: To promote religious freedom, some states may exempt religious garments from sales tax.
• Essential garments: Basic apparel used for common daily activities, such as shirts, dresses, trousers, skirts, socks, undergarments, and shoes, are commonly exempt from sales tax.
• Children’s clothing: Most states generally exclude children’s supplies and clothing from sales tax. However, take note that it could either be a full sales tax exemption or a partial one, depending on the state’s rules.

Despite learning about categories, price thresholds, and apparel types, checking each state’s rules is still a critical step for every clothing retailer in the U.S.

States With No Sales Tax on Clothing

As of February 2026, there are seven states that exempt necessary clothing from sales tax. Those states are: 

1. Massachusetts
2. Minnesota
3. New Jersey
4. New York
5. Pennsylvania
6. Rhode Island 
7. Vermont

Despite exempting basic clothing from sales tax at the state-level, keep in mind that local sales tax may still apply in some states, such as New York.

Additionally, five states have no sales tax in general. Therefore, they also do not apply tax on clothing. Those states are known asthe NOMAD states, comprised of Alaska, Delaware, Montana, New Hampshire, and Oregon.

NOTE: While Alaska does not have a statewide sales tax, its various jurisdictions are allowed to levy local taxes.

To learn more about these specific exemptions and which states apply sales tax on clothing, check out the table below.

State-by-State Guide for U.S Sales Tax on Clothing

Clothing sales tax rates vary significantly among different states. There are also variations in the sales tax exemptions on clothes in different states.

Note: Sales tax regulations keep changing frequently. Bookmark this table to keep yourself updated about the latest developments regarding sales tax on clothing.

STATE IS CLOTHING TAXABLE? SALES TAX RATE EXEMPTIONS (if any) Alabama Yes 4% Limited exemption during sales tax holidays Alaska Not applicable 0% Alaska has no statewide sales tax. However, its jurisdictions may apply local sales tax on clothes. Arizona Yes 5.60% Limited exemption during sales tax holidays. Arkansas Yes 6.50% Limited exemption during sales tax holidays. California Yes 7.25% Exemptions allowed for (1) new children’s clothing sold to nonprofit organizations for free distribution to elementary school children and (2) used clothing sold by certain thrift stores benefiting the chronically ill. Colorado Yes 2.90% None Connecticut Yes 6.35% Jewelry, handbags, designer clothing, luggage, umbrellas, and other similar items that cost more than $1,000 is subject to CT’s luxury goods tax rate of 7.75%.  Exemption applies to essential clothing and footwear sold for less than $100 each. Delaware Not applicable 0% There is no sales tax in Delaware. However, retailers should beware of the state’s Gross Receipts Tax (GRT). Florida Yes 6% Children’s or toddlers’ clothing is exempt since July 1, 2013. Limited exemptions apply when Florida announces specific clothing exemption programs or sales tax holidays.  Georgia Yes 4% None Hawaii Yes 4% None Idaho Yes 6% Sales of clothing to nonprofit organizations whose primary function is to provide free essential clothing to the needy are exempt in Idaho. Illinois Yes 6.25% None Indiana Yes 7% None Iowa Yes 6% Limited exemption during sales tax holidays. Kansas Yes 6.50% Limited exemption during sales tax holidays. Kentucky Yes 6% None Louisiana Yes 5.00% Limited exemption during sales tax holidays. Maine Yes 5.50% None Maryland Yes 6% Limited exemption during sales tax holidays. Massachusetts NO n/a Clothing costing less than $175 are exempt from sales tax. Sales tax applies to amounts that exceed $175. For example, a $200 apparel item means the $25 is taxable as it exceeds the $175 threshold. This state has a uniform sales tax rate. Therefore, there is no local sales tax on clothing in Massachusetts. Michigan Yes 6% None Minnesota NO n/a Essential clothing for daily use is generally non-taxable in Minnesota. However, accessories, most protective equipment, sports and recreational articles, and fur clothing are taxable. Mississippi Yes 7% Clothing, footwear, and accessories used as wardrobes in the production of motion pictures are exempt in Mississippi. Limited exemption also applies during sales tax holidays. Missouri Yes 4.225% Limited exemption during sales tax holidays. Montana Not applicable 0% There is no sales tax in Montana. Nebraska Yes 5.50% None Nevada Yes 6.85% None New Hampshire Not applicable 0% There is no sales tax in New Hampshire. New Jersey NO n/a Essential clothing for daily use is generally non-taxable in New Jersey. However, sales of fur clothing, accessories, sports, recreational, or protective equipment are taxable. Protective equipment is only exempt when purchased for the user’s daily work and worn as a work uniform. New Mexico Yes 4.875% None New York NO n/a The exemption is limited to clothing and footwear costing less than $110 per item or pair. If the purchase exceeds the threshold, the entire transaction is taxable. North Carolina Yes 4.75% Limited exemption during sales tax holidays North Dakota Yes 5% None Ohio Yes 5.75% Limited exemption during sales tax holidays Oklahoma Yes 4.50% Limited exemption during sales tax holidays Oregon Not applicable 0% There is no sales tax in Oregon. However, retailers should beware of the state’s Corporate Activity Tax (CAT). Pennsylvania NO n/a Essential clothing for daily use is generally non-taxable in Pennsylvania. However, luxury apparel such as accessories, fur articles, ornamental and formal wear, and sports gear is taxable. Rhode Island NO n/a Accessories and special clothing designed primarily for athletic or protective use are taxable. The exemption only applies to $250 of the sales price per item. South Carolina Yes 6% Certain protective clothing required for working in a clean room environment is exempt. Additionally, a limited exemption applies during sales tax holidays South Dakota Yes 4.20% A limited exemption only applies to purchases by qualified entities, such as non-profit organizations and ethnic tribes Tennessee Yes 7% An exemption applies to used clothing sold by certain nonprofit organizations. However, selling used clothes along with other taxable goods invalidates the exemption. Texas Yes 6.25% Limited exemption during sales tax holidays. Utah Yes 4.85% None Vermont NO n/a Essential clothing for daily use is generally non-taxable in Vermont. However, luxury goods such as accessories or equipment, protective gear, and sports or recreational apparel are taxable Virginia Yes 4.30% Limited exemption during sales tax holidays. Washington Yes 6.50% None West Virginia Yes 6% Limited exemption during sales tax holidays. Wisconsin Yes 5% None Wyoming Yes 4% None

Why Clothing Is Taxed Differently Across States

Clothing is taxed differently across states due to a variety of goals or reasons that the authorities may have. Typically, apparels are either taxed to generate revenue for funding state projects or exempted to support local households that are spending on essential items.

This system is not only limited to clothing, but it also applies to most goods and services that are subject to sales tax. Depending on the state, the taxability of specific items varies.

Sales Tax on Skins or Digital Apparel

Did you know? With the growing popularity of online apps, including games, even “skins” may now be taxable across states. For instance, Washington is steadily expanding its coverage of sales tax on digital goods.

This means that even digital clothing in video games and such can be subject to taxation.

Meanwhile, Pennsylvania also declared that digital products delivered electronically, digitally, or by streaming are taxable. This also includes “skins” or digital apparel.

Clothing Sales Tax Holidays

Some states do not exempt tax on clothing but offer clothing sales tax holidays that may last from several days to weeks. Take note that sales tax holidays vary annually.

Most clothing tax holidays happen from July to August for the back-to-school season. Here’s the list of states offering 2026 tax breaks specifically for clothing:

• Alabama (Back-to-School): Clothing ($156 or less/item)
• Alaska (Tax-Free Holiday): Most items are exempt
• Arkansas (Back-to-School): Clothing and footwear ($100/item or less) and accessories or equipment ($50/item or less)
• Connecticut (Back-to-School): Clothing and footwear ( $100 or less), accessories, and protective or athletic clothing are not included in this exemption
• Florida (Back-to-School): Clothing, wallets, and bags (up to $100)
• Iowa (Back-to-School): Clothing and footwear (less than $100)
• Maryland (Back-to-School): Clothing and footwear ($100/item or less) and backpacks (only the first $40)
• Massachusetts (Annual Tax Holiday): Tangible Personal Property (up to $2,500)
• Mississippi (Back-to-School): Clothing and footwear (less than $100)
• Missouri (Back-to-School): Clothing (less than $100)
• New Mexico (Back-to-School): Clothing and shoes ($100/item or less) and book bags, backpacks, maps, and globes (less than $100 per item). Retailers are not required to participate.
• Oklahoma (Back-to-School): Clothing and footwear (less than $100), excluding non-essential apparel
• South Carolina (Back-to-School): Clothing, footwear, and clothing accessories
• Tennessee (Back-to-School): Clothing and shoes ($100/item or less)
• Texas (Back-to-School): Clothing and footwear (less than $100) and backpacks, excluding non-essential apparel
• Virginia (Three-Day Sales Tax Holiday): Qualified exempt clothing and footwear (less than $100/item)
• West Virginia (Back-to-School): Clothing (less than $125) and sports equipment (less than $150)

NOTE: Sales tax holiday dates and timeframe are subject to change. Bookmark this blog to stay up-to-date with the latest tax breaks for clothing exemptions!

How to Calculate Sales Tax on Clothing?

There are different ways to calculate sales tax on clothing, but for starters, here’s how you can do it yourself.

First, list the price of the taxable product, including any taxable shipping charges. After that, take the state’s combined sales tax rate, depending on where you are. Then, convert the state’s combined rate into decimal format.

Once you convert the rate into decimal format, multiply the product’s price by the decimal format. The result is your estimated sales tax for that transaction.

Here’s the simplified formula breakdown:

• Price of Goods + Shipping Fee x
• State Sales Tax Rates +
• Local Sales Tax Rates
• = Your Total Sales Tax

Example Scenario:

• The taxable clothing product is worth $60 and was purchased in Conway, Arkansas, where clothing is taxable. 
• The combined state, county, city, and other local sales tax rates in Conway, Arkansas, are currently at 8.75%.
• Convert the state’s combined sales tax rate into decimal format. 8.75% turned into decimal format is: 0.0875
• Now, multiply the sale price by the decimal format of the combined sales tax rate of the city, county, and state.
  60 x 0.0875 is = $5.25
• Finally, add everything to the base sales price to accurately determine the sales tax on the taxable apparel.
  [Product Price] $60 +
  [Calculated Sales Tax] $5.25
• TOTAL = $65.25

To simplify the calculation, you can also use TaxHero’s FREE Sales Tax Calculator.

Sales Tax on Discounted Clothing, Donations, and Returns

The application of sales tax on clothing can become more complex if it involves discounted apparel or garments purchased for donations, including returned items.

For both buyers and retailers, knowing how to apply the correct rates is crucial to prevent excess payments and inaccurate tax reports.

Here’s a simple scenario to guide you.

Let’s say you are purchasing a taxable clothing item in New York. The clothing qualifies as a necessary good that is generally exempt from sales tax in New York as long as the price is under $110.

The items you bought are worth $200, and you have a $50 coupon. The calculation goes like this: 

• $200 minus $50 is $150. This is your discounted purchase price.
• New York’s sales tax exemption on clothing is capped at apparel worth $110. 
• Therefore, the entire transaction is still taxable as it exceeded the threshold.
• For that, take the state’s sales tax rate plus any applicable local charges to get the right tax rate.

Example breakdown (without any added local taxes):

• 150 (sales price with discount coupon) x
• 0.08875 (New York’s state sales tax rate in decimal format) 
• = $13.31 (rounded off sales tax)
• Now, take the calculated sales tax and add it to the price of the discounted apparel.
• $13.31 sales tax + $150 apparel
• TOTAL PURCHASE PRICE: $163.31

Need help with calculations? Get in touch with TaxHero for assistance and never worry about these numbers again!

When to Collect Sales Tax on Clothing?

Knowing what clothing sales tax is and how it works is one thing, but knowing when to start collecting is another concern most new businesses tend to ask.

The short answer: You must start collecting whenever you sell taxable clothing once your business is registered in a state and it has established a sales tax nexus.

What is Sales Tax Nexus?

A sales tax nexus is a rule created to define your business presence in a state. You may view it as a bridge that connects your business to a state’s economic system. Once you fully cross that bridge, you formally establish a sales tax nexus with that state.

When a sales tax nexus is created, your business is generally required to register in the state and begin collecting and remitting sales tax.

But how can you identify once a sales tax nexus exists for your business? Two types of sales tax nexus determine your business’s presence in a state: physical nexus and economic nexus.

Physical Nexus

A business establishes a physical nexus by having a substantial physical presence or engaging in enough taxable sales activities within a state. Here are the common factors that create a physical nexus in most states.

• Physical Location: Having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
• Inventory in the State: Storing products within the state, whether it’s done via a third-party fulfillment center or 3PL (such as Amazon FBA) or an online marketplace.
• Business Representatives: Having employees, independent contractors, agents, or other representatives operating within the state on your behalf.

Keep in mind that these are only 3 common factors for a physical nexus. Some states may have other conditions for establishing a physical nexus, such as an affiliate nexus or click-through nexus, as well as being present in trade shows, and more.

Economic Nexus

Economic nexus is established based on two common factors. 

• Total sales revenue and/or
• The number of transactions you’ve had within the state. 

Each state has different thresholds, and these thresholds are also subject to change.

For example, in Alabama, the economic nexus threshold is only $250,000 in gross revenue in the previous calendar year’s sales. Once you meet that amount when making taxable sales of apparel in Alabama, you now have an economic nexus in the state.

Note that Alabama has already eliminated its 200-transaction threshold, and other states may also do the same.

To check each state’s economic nexus threshold, read: Ultimate Guide to Understanding Economic Nexus

Who Needs to Collect Sales Tax on Clothing?

As explained above, you should start collecting once you create a sales tax nexus. Now that you know the two types of nexus, which one can your business trigger? 

• State-based Businesses: Generally, in-state businesses can quickly establish a physical nexus in the state due to having physical presence, such as having physical stores or warehouses. This often leads local businesses to register almost immediately, unlike remote sellers selling in another state.
• Out-of-state Businesses (Online Sellers): Remotely selling taxable clothes in a state can still make you liable to sales tax obligations once you establish an economic nexus in a state. This means that even if you have no physical presence in the state, businesses must still register for sales tax as long as they create an economic nexus.

Did you know there’s an easy way to keep track of your nexus nationwide? You can try TaxHero’s nexus analysis through our free demo!

How Clothing Retailers Can Stay Sales Tax Compliant

With the complex nature of clothing taxability rules in the U.S., staying compliant feels like a difficult endeavor. To avoid unwanted penalties, here are 5 critical things every clothing retailer should know to stay compliant.

1. Keep track of your nexus – It’s important to know where you stand in the “invisible bridge” that connects your business to a state’s economic system. Once you cross that bridge and establish a nexus, you’ll have to register and comply with tax regulations. Failure to comply results in penalties that can harm your business.
2. Check every state’s specific rules – Never assume that one state’s sales tax rule is the same as another’s. Even if some rules seem common among many states, it’s still best to navigate safely by verifying every individual state’s specific rules. 
3. Always keep records – Your transactions are proof of your business activities. Once your business creates a nexus, a good practice to stay compliant is to maintain records. These records will help your business stay clear during audits and prevent penalties.
4. Identify your product’s taxability – The taxability of clothing varies depending on the state’s specific rules and guidelines. You must know where your product is subject to taxation and where it is exempt, whether partial exemption or not.
5. Calculate carefully – Clothing sales tax can be complicated, as each line has to be processed, especially when considering additional discounts and other factors that can alter the default rates. Even a small difference in the report can cost you an audit.  When calculating apparel taxes, always be mindful of local surcharges, district taxes, and local option taxes that may apply to your transactions.

NOTE: You can also consider outsourcing sales tax compliance by choosing the most suitable tax software for your needs. With TaxHero, we handle all your compliance requirements so you don’t have to.

Let TaxHero Help Manage Your Clothing Sales Tax

Running an apparel store shouldn’t be too complicated. Let expert accountants at TaxHero handle your compliance concerns. From identifying your taxabilities and filing your sales tax reports on time, we take everything off your hands so you can focus on growing your business.

Schedule a call with our CEO and get a FREE DEMO of our software today!

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