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State tax-free holiday coming up

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What qualifies and what doesn't

By Reece Murphy

Heads up, parents! Here come two blatantly obvious observations: 1) It’s not cheap raising young’uns; and 2) every penny counts when you are raising children.

Which brings us to another blatantly obvious observation: If you do have children, and they’re heading back to school Aug. 20, you’d be crazy not to take advantage of the state’s annual sales tax holiday.
And it’s right around the corner.

Set, as always, for the first weekend of August, this year’s “tax-free weekend” runs from 12:01 a.m. Friday, Aug. 3, through midnight Sunday, Aug. 5. North Carolina’s back-to-school tax holiday is the same weekend.
That means you can buy everything from clothes to computers – and all the pens, paper, binders and glue sticks you ever wanted – sales and use tax free.

In Lancaster County, that amounts to 8 cents on every back-to-school dollar you’ve got to spend anyway.
If you’re a parent – or anybody else – who wants to save what could be quite a few pennies, read on for everything you need to know about this year’s S.C. Sales Tax Holiday.

What qualifies
South Carolina’s list of qualifying items includes:

  • Clothing
  • Clothing accessories including, but not limited to, hats, scarves, hosiery and handbags
  • Footwear
  • School supplies, including, but not limited to, pens, pencils, paper, binders, notebooks, books, bookbags, lunchboxes and calculators
  • Computers, printers, printer supplies, computer software and computer service updates conducted during the tax holiday (Note: Computer parts, such as keyboards, mouses, scanners, etc., not sold in conjunction with a computer are not tax-exempt.)
  • Blankets, bedspreads, bed linens, sheets sets, comforter sets, pillows, pillow cases, bath towels, washcloths, bath rugs, bath mats and shower curtains
  • New this year: Tax exemption on “portable devices that have computing and media functions, allow users to access the Internet and have a multitude of software applications ... provided such devices do not allow users to make telephone calls.”
  • Translation: Tablet computers are tax free.

What doesn’t qualify

  • Jewelry, cosmetics, eyewear, wallets, watches
  • Furniture
  • Items placed on layaway or similar deferred payment and delivery plans
  • (Note: “90 days same as cash” items do qualify for tax exemption, provided the contract to pay is signed and the item delivered during the sales tax holiday, or if the retailer accepts the order for “immediate shipment” during the sales tax holiday, even if delivery is made afterward, due to retailers inability to deliver on time)
  • Clothing or footwear rentals
  • Sale or lease of items for use in a trade or business

Other information

  • Qualifying items purchased over the Internet or by mail order are tax free as long as they’re ordered during the three days of the sales tax holiday.
  • Delivery charges and alteration charges for clothing purchased during the sales tax holiday, both of which are usually added “pre-tax,” are tax exempt.
  • Exchanges of items purchased during the sales tax holiday will remain tax free even if made after the holiday, as long as they are exchanged for the same item (e.g., different size, different color, etc.). If, during the sales tax holiday, a customer exchanges a qualified item purchased before the sales tax holiday, or uses a return credit from a qualified item purchased before the holiday, the new item is not subject to any additional tax. If, however, a customer returns an item purchased during the sales tax holiday and receives credit, any new item purchased after the holiday with the credit is subject to sales tax.
  • Rain checks issued during the sales tax holiday, if used after the holiday, will not qualify an item for tax exemption.  Qualified items purchased during the sales tax holiday using rain checks are tax exempt, regardless of when the rain check was issued.
  • North Carolina’s tax-free holiday is slightly different and applies to clothing under $100, school supplies under $100, instructional material under $300,computers under $3,500, computer equipment under $250 and sports equipment under $50.
  •  “Sales tax free” includes all local sales and use tax, not just South Carolina’s statewide 6 percent sales tax.

Finally, as you’re shopping, don’t let a retailer of qualified items tell you they’re “not participating” in the sales tax holiday — they are, whether they like it or not. According to state law, the state Department of Revenue can revoke the business’ license if they charge sales tax that is not legally due.

With that in mind, get ready, you now have all the information you need to get your back-to-school shop on.
For a complete list of qualifying and non-qualifying items during the S.C. Sales Tax Holiday, visit www.sctax.org and search under the “What’s New?” section.