Sales Tax Holidays: January 2024

Sales tax holidays are one way states help make the things people need to buy a little more affordable. Different states offer sales tax holidays at different times of the year to both help consumers and give businesses a sales boost by encouraging people to spend money and make bigger purchases during a sales tax holiday.

January isn’t typically a month when there are any sales tax holidays but one state decided to schedule one in January this year: Florida.

We’ll fill you in on what a sales tax holiday is, what Florida’s January 2024 sales tax holiday is focused on, and what that means for your business.

What’s a Sales Tax Holiday?

A sales tax holiday is a period of time when a state does not collect sales tax on certain qualifying items. While some sales tax holidays offer a sales tax break on all purchases, most sales tax holidays are limited to specific types of items.

For example, many states have sales tax holidays on things like energy-saving appliances, disaster prep, or back-to-school supplies. In November, New Mexico even had a sales tax holiday on Small Business Saturday to support small businesses. For one day, they didn’t charge taxes on purchases under $500 from small businesses in New Mexico that had fewer than 10 employees.

Sales tax holidays can range from one day, like in New Mexico, to several weeks or even a month. They can also limit the price range of the items, the type of businesses that qualify for the sales tax holiday, or the type of consumers who qualify for the holiday. For example, some sales tax holidays might target active duty military service members.

To keep up-to-date on sales tax holidays, make sure to follow TaxCloud’s blog. We write a monthly series about sales tax holidays.

Florida Sales Tax Holidays

During the 2023-2024 school year, Florida scheduled two back-to-school sales tax holidays. The first took place from July 24, 2023, until August 6, 2023, and was meant to help Florida families save money on back-to-school items.

Florida’s second back-to-school sales tax holiday is meant to help families get ready for the start of the second semester of the school year. It will start on January 1, 2024, and run for two weeks until January 14, 2024.

Florida’s January sales tax holiday will include the following items:

• Learning aids like flashcards, memory games, and jigsaw puzzles priced at $30 or less.
• Most school supplies priced at $50 or less.
• Clothing and footwear selling for $100 or less.
• Bags including backpacks, handbags, and fanny packs selling for $100 or less.
• Computers selling for $1,500 or less (only when purchased for personal use). This includes laptops, desktops, handhelds, tablets, and electronic book readers.
• Computer accessories like keyboards, mice, monitors, modems, and routers under $1,500.

To help businesses better understand what is and isn’t exempted from sales tax during the back-to-school sales tax holiday, the state created a Frequently Asked Questions document to spell out exactly what’s included in the sales tax holiday – and what isn’t.

An important thing to note is that, while Florida’s sales tax holiday is designed to help families, you do not have to have kids in school to benefit from it. Anyone in Florida can purchase any of the qualified goods involved in the sales tax holiday and not have to pay sales tax on their purchases during the holiday period.

What Does It Mean for You?

If you have physical or economic nexus in Florida, this sales tax holiday could potentially apply to your business.

The first thing you need to do is determine if you sell any of the items that will be exempted from sales tax during Florida’s back-to-school sales tax holiday in January. Make sure to read through Florida’s Frequently Asked Questions document closely as not all items that will be exempted are only used by students. If you sell notebooks, clothing for any age group, or even diaper bags, those products will be subject to the sales tax holiday.

Once you’ve identified which products you sell that will be exempted from sales tax for Florida residents during the sales tax holiday, you’ll have to set it up in your ecommerce platform to ensure that you’re not charging sales tax on those items to Florida residents during that period.

After the sales tax holiday is over, you’ll also have to claim your sales tax holiday deduction. To do that, you’ll need to include the appropriate deduction code for the relevant transactions when you file your sales tax return in Florida for January.

If all that information feels overwhelming, get in touch with our team to learn how we can help!