Prepare for Savings: New Texas Emergency Preparation Sales Tax Holiday

Sovos Tax Research Team
April 7, 2016

On your mark…get set…SHOP! Beginning at 12:01 am on Saturday April 23rd, certain emergency preparation supplies will be exempt from tax until midnight on Monday April 25th as part of Texas’ first annual Emergency Preparation Sales Tax Holiday. The exemptions will apply at all taxing jurisdiction levels as all counties and municipalities must participate in this sales tax holiday.

Qualifying Items

  • Purchases of items such as batteries, coolers, first aid kits, and carbon monoxide detectors are exempt from sales tax if they are sold for less than $75 per item.
  • Items such as hurricane shudders and emergency ladders are exempt if sold for less than $300.
  • Additionally, portable generators sold for less than $3,000 qualify for the exemption.

The Fine Print

Leases or Rentals: Qualifying items may be leased or rented tax-free if the rental or lease contact is executed during the holiday weekend. Extensions will not qualify unless executed during the holiday period.

Delivery, Shipping and Handling: Delivery or shipping and handling charges are included in the total sales price of an item. The charges are exempt as long as the total charge for the item and accompanying delivery charges do not exceed the item’s appropriate price threshold.

For example, if a carbon monoxide detector sells for $74.00 and is delivered for a charge of $10.00 for a total sales price of $84.00, the sale is not eligible for the exemption. If a carbon monoxide detector sells for $50.00 with a delivery cost of $10.00 for a total sales price of $60.00, the total sales price is exempt.

Layaways: The purchase of an item under a layaway plan qualifies for the exemption when one of the following occurs:

1) The purchase places a qualifying item on layaway during the exemption period and the seller accepts the order for immediate delivery upon full payment, even if the actual delivery is made after the exemption period or;

2) The final payment for a qualifying item on layaway is made and the item given to the purchaser during the tax holiday.

As you can see, dealing with and implementing new sales tax holidays can be difficult and headache inducing.

Why not take the stress away and let our tax experts at Sovos Compliance handle the complexities for you? We offer comprehensive support solutions for all sales tax holidays. To speak with one of our experts today to discuss your needs and how we can help you, contact us.

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Sovos Tax Research Team

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