A number of states across the country are hosting tax free holiday weekends for school supplies and clothing in the month of August. Some folks get super fired up about this “awesome deal,” but do you really save in the long run?
Let’s look at a couple of shopping examples:
Purchase: $10.00 in school supplies
Sales Tax: $ 0.81 (at 8.125%)
Purchase: $100.00 in school supplies
Sales Tax: $ 8.13 (at 8.125%)
Will you save money? It looks that way. You can save 81 cents when you spend $10. You can save $8.13 when you spend $100.
The key questions to ask yourself during a tax free holiday weekend are:
- Do you really need these items?
- Will crowds cause you to take more time to make the purchase?
Some people buy things on sale just to feel like they’ve gotten a deal – even if they don’t truly need those items. In cases like this, the individual isn’t really saving money. They’re losing the full out-of-pocket amount they spent because they’re adding something to their inventory that they truly do not need.
Often with big sales come big crowds. With big crowds come more driving – and therefore, more fuel – to find parking, longer waits in traffic (time + fuel), slower walking in the store (time), longer checkout lines (time), and so on. If it would normally take you 15 minutes to get in and out of a store to make a purchase, but with a crowd it will take 30 minutes, you’ve just used 15 minutes to take twice as long to complete the same task. That extra 15 minutes could have been used to complete another task or … just relax.
If you truly need the items, and it won’t take you too much longer to make the purchases, then a tax free holiday weekend is definitely a good deal for you. If the items that you need are on sale, then that’s an added bonus. If not, you really need to think about whether or not you’re actually saving.
For information about the sales tax holiday in Texas, visit the Texas Comptroller’s website.
To see if your state will have a sales tax holiday, see this article from Deal News.
For more info similar to how to figure out if a tax free holiday weekend saves you time and money – and other productivity tools and tips – from time management keynote speaker Helene Segura, click here.