With school just around the corner starting Aug. 20 in Creston, some parents can be found in the clothing and shoe aisles at local stores, looking for that one bargain for their child's first day outfit.
One such sale is Iowa’s sales tax holiday, an annual two-day event the first weekend in August when certain types of clothing and footwear can be purchased without paying sales tax or local option sales tax.
From midnight Aug. 1 to midnight Aug. 3, no sales tax will be on clothes and shoes.
“Any business who sells items of clothing or shoes will have to participate,” said Ellen Gerharz, executive director of Creston Chamber of Commerce. “The state has dictated that the first Friday and Saturday in August, that no tax can be collected on items under $100.”
The mandate spreads to any company with products considered clothing or shoes, such as gloves at Casey’s General Store, or shoes at Van Gelder’s.
“Hopefully it brings people into the community to purchase items,” Gerharz said. “We always hope people will take advantage of that 7 percent. ... Hopefully people come into the community and make their purchases, and while they’re here they might buy school supplies, belts, jewelry and other accessories.”
Tax holidays became nation-wide in 1996, when a statewide sales tax holiday was enacted in New York. Since then, 13 states, including Iowa, have taken up tax holidays throughout the year.
Most of the holidays occur in August, while some are at other times of the year. Connecticut and Maryland have seven-day holidays and Virginia and Louisiana’s tax-free items include hurricane preparedness items. Virginia is the only state with three tax holidays throughout the year.