Tax Free Weekend
By Allie Fevold, CPA
Well... it's almost that time of year again... Tax Free Weekend! With the first day of school right around the corner, why not take advantage of this sales tax holiday and buy the kiddos some new school attire or spoil yourself! It may not seem like much, but with the sales tax increase that occurred July 1st for several cities in Polk county, you can now avoid 7% sales tax.
I remember when I was a kid, school starting up again wasn't the most exciting thing. Long days at the pool, staying up late on week nights, bonfires with friends, and camping were all sadly coming to an end. But one thing I did enjoy with school starting again, was shopping for new school supplies and clothes. Every year my mom would take my siblings and me to the store and we would pick out the essentials: folders, pens, lunch boxes, backpacks and the best.. some new outfits.
Although it's tax free weekend, unfortunately the only items that qualify are certain clothing and footwear that cost $100 or less, regardless of how many items are purchased in the same transaction. Online purchases can also qualify, as long as delivery occurs during this period or purchases are ordered and paid for during this period. This year Tax Free Weekend is on Friday, August 2nd and Saturday, August 3rd.
Helpful tips and reminders for businesses:
- Exempt sales are reported on line 4 of the Iowa Sales/Retailer's Use Tax and Surcharge return and there is a specific line for the Sales Tax Holiday.
- Make sure to fill out the Local Option Sales Tax part (line 6b) of the return, if applicable. Many Polk county cities including Des Moines, Alleman, Altoona, West Des Moines, Pleasant Hill, and Windsor Heights voted for the local option tax.
- Registrants must file the Iowa Sales/Retailer's Use Tax and Surcharge return even if there was no activity.
- Make sure to timely file returns and pay tax due to avoid penalties and interest. Any fraction of a month is considered a whole month, so interest can add up quickly.
Take advantage of this holiday - save some money and support your local businesses!
Allie Fevold, CPA | Senior Accountant