Back-to-School Spending Could Dip 10%, But Sales Tax Holidays in 17 States Offer Parents Relief | Wealth of Geeks

As the back-to-school season approaches, parents are feeling the pinch. Amid persistent inflation and shrinking savings, school spending is expected to drop by 10 percent to $597 per student compared to last year. 

Parents prioritize school supplies over clothes and technology but are willing to splurge on specific items. Fifty-nine percent of parents surveyed plan to shop early, with 80% shopping at mass market retailers before looking online. Shoppers looking for deals will find them in 18 states that are eliminating sales tax for several days or more to help families save money on their back-to-school shopping.

Economic Pressures Drag Down Back-to-School Spending

The cost of school supplies has risen 23.7 percent over the past two years, according to the Bureau of Labor Statistics’ Consumer Price Index. Deloitte’s annual Back-to-School survey found that budget-conscious parents plan to prioritize their spending and search for ways to save.

Respondents expect to spend 14 percent less on clothes, 13 percent less on technology, and 20 percent more on back-to-school supplies. Despite these concerns, nearly 6 in 10 back-to-school shoppers are willing to splurge on higher quality items or treat their child with specific purchases.

This year, 80 percent of parents are making mass merchants their top spot to shop, over online retailers, off-price retailers, and dollar stores. Whereas parents may have shopped at online shoe stores last year, in 2023, they’re heading to brick-and-mortar stores for deals. With interest rates high, 77 percent of families plan to shop with cash over credit cards.

17 States Offering Specific Sales Tax Savings

The Federation of Tax Administrators lists 18 states offering sales tax holidays. Unfortunately, in several states, information still needs to be updated from last year. Specific dates, savings, and eligible items vary. 

Arkansas: August 5 to 6 – Tax exemptions on clothing under $100 per item, school art supplies under $50 per purchase, select textbooks, and school supplies under $50 per item.

Connecticut: August 20 to 26 – Tax exemptions on specific clothing and footwear under $100 per item.

Florida: July 24 to August 6 – Tax exemptions on learning aids, jigsaw puzzles up to $30, select school supplies up to $50, clothing, footwear, and accessories up to $100 per item, and the first $1,500 of personal computers and computer-related accessories.

Iowa: August 4 to 6 – Tax exemptions on select clothing and footwear under $100 per item.

Maryland: August 13 to 19 – Tax exemptions on backpacks or book bags up to $40, qualifying clothing and footwear up to $100 per item.

Massachusetts: August 12 to 13 – Tax exemptions on retail items up to $2,500 for personal use; Excludes cars, gas, telecom services, and others.

Mississippi: July 28 to 29 – Tax exemptions on qualifying clothing, footwear, and school supplies under $100 per item.

Missouri: August 4 to 6 – Tax exemptions on clothing up to $100 per item, school supplies up to $50, computer software up to $350, computers and computer accessories up to $1,500.

Nevada: October 27 to 29 – Purchases by National Guard Members are exempt.

New Jersey: August 27 to September 4 – Tax exemptions exist for school and art supplies, instruction materials, and computers up to $3,000.

New Mexico: August 5 to 7 – Tax exemptions on qualifying clothing under $100, computers under $1,000, computer-related items under $500, handheld calculators under $200, and school supplies under $30.

Ohio: August 4 to 6 – Tax exemptions on instructional materials and school supplies up to $20 per item, qualifying clothing up to $75 per item.

Oklahoma: August 4 to 6 – Tax exemptions on qualifying clothing and footwear under $100 per item.

South Carolina: August 4 to 6 – Tax exemptions on printers, software, bed linens, footwear, and other eligible items.

Tennessee: July 28 to 30 – Tax exemptions on qualifying clothing up to $100 per item, school supplies up to $200, computers and tablets up to $1,500.

Texas: August 11 to 13 – Tax exemptions on qualifying clothing, footwear, backpacks, and school supplies under $100 per item.

West Virginia: August 4 to 7 – Tax exemptions on specific clothing up to $125, laptop and tablet computers up to $500, general school supplies up to $50, and selected sports equipment up to $150.

Additionally, Alabama offered tax exemptions on clothing up to $100, school supplies up to $50, computers up to $750, and books up to $30 per book, from July 21 to 23.

Many of these state sales tax holidays occur annually, giving shoppers who miss one this year an opportunity to plan for 2024.

Maximize Savings With a Back-to-School Shopping Strategy

In addition to shopping for deals and taking advantage of sales tax holidays where available, parents can save more with a shopping strategy.

Create a Budget

Set a clear budget for back-to-school shopping based on your financial situation. Stick to this budget to avoid overspending on unnecessary items.

Prioritize Necessities

First, focus on purchasing essential items like school supplies, backpacks, and clothing. 

Compare Prices

Before purchasing, compare prices from different retailers and online platforms. Look for discounts and deals that can help you save further.

Reuse and Recycle 

Check if you have any school supplies or clothing your child can still use from the previous year. Reusing items can help cut down on expenses.

Shop Online

Consider shopping online for convenience and potential discounts. Online retailers may offer exclusive deals and cashback options. That is particularly true for parents looking to save on kids’ phone plans.

While inflation may squeeze parents out of some of the joy of back-to-school shopping, the availability of sales tax holidays offers hope. By approaching back-to-school shopping strategically and being mindful of their budgets, families can ensure a fun start to the new academic year.

This article was produced by Media Decision and syndicated by Wealth of Geeks.

John Schmoll, MBA is the founder of Frugal Rules, an online community he started in 2012 that is dedicated to helping people kill debt, earn more money, learn to invest, save money in all areas of life, and achieve financial freedom. He’s a former stockbroker, MBA-grad and freelance finance writer. He has been featured on Forbes, CNBC, Personal Capital, U.S. News & World Report, Prudential, Discover, MSN, Nasdaq, the Wall Street Journal, and more.

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