Mark Your 2025 Calendar: Texas Sales Tax Holidays!
TX: During Texas’ annual sales tax holidays, certain taxable items are exempt from sales tax for a limited time. Timing and planning are critical for retailers, so be sure to mark your 2025 calendar for this year’s three sales tax holidays:
- Emergency Preparation Supplies: Saturday, April 26, through Monday, April 28, 2025.
- Energy Star and Water-Efficient Products: Saturday, May 24, through Monday, May 26, 2025 (Memorial Day).
- Clothing, Footwear, Backpacks, and School Supplies: Friday, August 8, through Sunday, August 10, 2025.
Know the Exemptions and Holidays
Each sales tax holiday exempts different items from sales tax, but there are common aspects and steps to take to ensure a smooth experience.
Know the Details of Each Holiday
Retailers and customers should familiarize themselves with the exempt items and understand how pricing adjustments, such as rebates, discounts, coupons, and delivery charges, can impact an item’s tax-exempt status. If a maximum sales price is set by law, these factors can make an item eligible for the exemption. Retailers should also review administrative rules and publications for each holiday to understand how to handle exchanges and returns after a tax-free sale.
Plan Ahead
Retailers should update their sales tax software to account for these temporary exemptions. Training in-store and online staff is also crucial to ensure they are prepared to assist customers. Making the Comptroller’s Rules, Publications, and other resources readily available to staff and customers can help avoid confusion.
Keep Accurate Records
Do not include tax-free sales in “Taxable Sales” on your sales tax return when reporting sales for the period. Instead, include them in “Total Texas Sales.”
Generally, customers do not need to provide a resale or exemption certificate for tax-free purchases. However, there are exceptions. For example, retailers must obtain an exemption certificate from a customer using a business account to purchase school supplies during the clothing, footwear, backpacks, and school supplies sales tax holiday.
Report or Refund Tax Collected in Error
Retailers must report and remit any sales tax collected, even if it was collected in error. If tax is mistakenly collected on an exempt item and a customer requests a refund, retailers have two options:
- You can refund the tax to the customer, request a refund from the Comptroller’s office, or take credit on the next sales tax return.
- Provide the customer with Form 00-985, Assignment of Right to Refund, so that they can request a refund directly from the Comptroller’s office.
For additional details, visit the Sales Tax Refunds webpage on the Texas Comptroller’s website or reach out to one of our sales tax consultants.
By planning ahead and staying informed, retailers can ensure a smooth and successful sales tax holiday experience for staff and customers.
About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC, we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.