As a parent, you know that back-to-school means shopping for new clothes, school supplies, and electronics. These annual expenses can add up to hundreds of dollars. Tennessee gives families and bargain hunters a break with tax-free shopping that saves almost 10% on eligible purchases. Here are all of the details for the Tennessee tax-free weekend of 2020.
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What is Tennessee tax-free weekend?
Tennessee tax-free weekend is an annual event where families save money on the items that they need most as their kids go back to school. This savings of almost 10% is even more critical during the coronavirus epidemic. So many families are suffering from unemployment or reduced income right now and these savings are a welcome relief.
While shopping during the Tennessee tax-free weekend, normal sales taxes of almost 10% will be waived on eligible purchases.
When is Tennessee tax-free weekend?
For 2020, there will be two Tennessee tax-free weekends.
- July 31st – August 2nd
- August 7th – August 9th
The first tax-free weekend is from July 31st through August 2nd and focuses on traditional back to school items, such as clothing, school supplies, and computers.
As a way to support local restaurants, a second tax-free weekend was added for August 7th through August 9th. This second weekend eliminates the tax on dine-in and takeout sales of food and alcohol.
Tax-free weekend of July 31st through August 2nd
The Tennessee tax-free weekend happens every year during the last weekend in July as children and families prepare to go back to school.
The annual sales tax holiday begins at 12:01 am on Friday, July 31, 2020, and ends at 11:59 pm on Sunday, August 2, 2020.
Tax-free weekend of August 7th through August 9th
A second Tennessee tax-free weekend has been added for this year. According to officials, it will happen this year only. The second tax holiday happens from August 7th through August 9th.
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List of tax-free items
Families and bargain hunters can save almost 10% on their purchases during the Tennessee tax-free weekend. Eligible items include those purchased from Tennessee retailers as well as internet or catalog purchases delivered to a Tennessee address.
The categories eligible for tax-free purchases include:
- Clothing
- School supplies
- Computers and other electronics
Within these categories, each type of goods have a limit to what is considered eligible to be tax-free:
| Category | Exempt |
| Clothing |
|
| School supplies |
|
| Computers & other electronics |
|
During the second tax-free weekend of August 7th through 9th, the retail sale of food and drink from restaurants and limited services restaurants is exempt from sales tax. The law does not explicitly state any limits on the amount of food and drink you can buy tax-free.
This Tennessee web page lists all tax-free items in greater detail. It will help answer questions about whether specific items are eligible or not.
Is there a limit to the number of items that I can buy?
There is no limit to the number of eligible items that you purchase, so long as the purchase price of each item is under the applicable threshold described above.
Does tax-free weekend apply when shopping online?
Yes. When you purchase eligible tax-free items online, over the phone, via email, or in-person, you will not pay any sales tax. The tax is waived based on when you make your purchase, not when the items are delivered. Items that you order can be mailed to you, picked up in-person, or received via curbside pickup.
Read: 9 Simple Tips to Maximize Dining Rewards When Eating Out
Are layaway purchases eligible?
If you have an item on layaway, that item is eligible to be tax-free based on when the final payment is made. Additionally, you can place items on layaway during the Tennessee tax-free weekend and they will be tax-free even if you make the final payment later in the year.
What if the item is on backorder?
Due to the coronavirus pandemic, our country’s supply chain has been interrupted so many items are on backorder or out of stock. You may still purchase the item during the Tennessee tax-free weekend and have it remain tax-free when it becomes available. Customers will not be penalized when a backorder is beyond your control.
If I exchange the item later, will I be charged sales tax?
When you buy an eligible item during the sales tax holiday, then later exchange it for a different size or color, then it will not be charged sales tax during the exchange.
If you return the item for store credit, then buy something else, you will be charged sales tax for the new item that you purchase.
Do business purchases count?
No. The Tennessee tax-free weekend is designed for personal use only.
What items are excluded?
Unfortunately, sales tax is not waived on every item that you purchase. As mentioned above, only certain categories of items are included and some have limits on how much you can pay per item.
Anything outside of the eligible categories is excluded from this sales tax holiday.
In addition, there are some exempt items within these categories:
| Category | Not exempt |
| Clothing |
|
| School supplies |
|
| Computers & other electronics |
|
What should you do with the savings?
Avoiding the sales tax on back-to-school shopping and electronics purchases is a great way to save money. Here are some suggestions on what to do with your savings:
- Contribute to a 529 Account for your child. We use CollegeBacker (referral link)
- Build your emergency fund. We use Capital One 360.
- Invest the money. We use SoFi Invest (use my referral link to get $50)
- Pay down your debt. Consider a 0% balance transfer offer to eliminate interest.
- Save for a family vacation.
The possibilities are endless. But, if you don’t set aside the money towards one of your goals, you could fritter away the money on something that’s less important to you. Don’t forget this important step!
The Bald Thoughts
We never had tax-free weekends like this in California. Now that we’re living in Nashville, we’ve started to adjust our annual shopping so that we can take advantage of the Tennessee tax-free weekend when buying clothing, school supplies, and electronics. By grouping our purchases and scheduling them for July in our budget, we’re able to save almost 10% by avoiding the sales tax.
Do you have tax-free weekends where you live? What items do you buy and what do you do with the money you save?
