During this annual sales tax holiday you can buy most clothing, footwear, school supplies and backpacks (sold for less than $100) tax free from a Texas store or from an online or catalog seller doing business in Texas. This is a 19-year tradition in Texas and a break from the 8.25 percent sales tax people pay every day on school supplies, shoes and clothing. The sales tax may sound like a trivial amount, but if you’re spending $500 to get two or three kids back in school, that’s $40 for lunch at the mall.
Texas Comptroller’s office has predicted shoppers will save $87 million in state and local taxes this weekend. Here are some ways that you can prepare and capitalize this sales-tax holiday.
- Know what’s tax exempt and what’s not. Make sure you understand which items you sell are tax exempt- and reprogram your point-of-sale systems accordingly. To learn more about which items qualify visit this link.
- Plan your inventory. In anticipation of this tax holiday, consider stocking up your best-selling items that meet the requirements for sales-tax exemption. Aim to sell about 75% of what you’ve bought for that time of year, but avoid over-stocking as well. Also decide whether you’ll display tax-exempt items font-and-center or at the back of the store.
- Anticipate staffing needs. Expect higher foot traffic during the holiday. You may want to staff your store with a few extra people than you would on a normal weekend.
- Communicate to customers. Tell customers about the sales-tax holiday. Consider creating a flyer listing the products you have available.
- Focus on customer experience. Sales-tax holidays don’t mess with your margins, but offering deeper discounts to compete on price can. Your goal should be to help customers have such a positive experience that they will return to your store. Consider making the holiday more festive with music or balloons, if that’s appropriate for your brand.