Tax Policy Podcast: Emergency Preparation Supplies Sales Tax Holiday

Tax Policy Podcast: Emergency Preparation Supplies Sales Tax Holiday


It’s Stefanie, with Tax Policy. Today
we’re here to talk about the emergency preparation supplies sales tax holiday,
and it’s happening Saturday, April 27 through Monday, April 29. Now,
for those of you who don’t know, this is a huge tax break in Texas. I have Jerry
Paredes, also with Tax Policy as my guest today to talk about this upcoming sales
tax holiday. And thank you, Jerry, for stopping by. Hi, Stefanie. Thank you for inviting me. First, can you explain to our listeners what exactly is a sales tax holiday? Oh, absolutely. So even though the Texas sales and use tax is the largest single source of state tax revenue, there are a few days
when consumers can catch a break each year on paying sales tax. On these
designated weekends, specific items or categories of items can be purchased
without paying state and local sales taxes. Now, offhand I know of maybe one or
two sales tax holidays, but how many are there really? I’m glad you asked that,
Stephanie. Texas has a total of four sales tax holidays per year. There is the
emergency preparation supplies, that takes place a weekend in April. The Texas
Energy Star, held during the Memorial Day weekend. The water-efficient products,
also held during the Memorial Day weekend. And the most common one, sales tax holiday back-to-school items, which takes place during a weekend in August. Alright, and today we are focusing on the emergency preparation supplies sales
tax holiday. So what exactly is the purpose of this holiday? Well, when it comes to natural disasters, Texans are no strangers to these unforeseen events. The purpose of this holiday is to encourage Texas consumers to reinforce their
properties and to prepare for the upcoming storm seasons. This holiday also brings public awareness about the importance of preparation for
weather-related events and potential emergencies. Oh, yes. You’re absolutely right. Over the years, our state has had its share of disasters
caused by hurricanes, tornadoes, fires and floods. Now, what type of emergency
preparation supplies qualify during this tax-free weekend? Qualifying supplies that are tax-free include portable generators priced at less than $3,000; hurricane shutters and rescue ladders priced at less than $300; and other numerous items priced less than $75. These include
batteries; fire extinguishers; fuel containers; hatchets; portable light
sources, such as candles, flashlights and lanterns; and waterproof sheeting. Okay. Well, let’s talk about the first category you mentioned: portable generators priced at less than $3,000. And, I was glad you said that, because a
portable generator has actually been on my list for a while. But nowadays, I find
myself doing a lot more online shopping. If I buy a qualified generator online
during the sales tax holiday weekend, will it still be tax free? As long as the portable generator is less than $3,000, yes, it will be tax-free during the tax-free weekend regardless if it is purchased online or in the
store. One thing to remember is the delivery, shipping, handling and
transportation charges. These charges are all part of the sales price and could
affect the exemption. Umm, Jerry, what do you mean by “affect the exemption?” Well, let’s see. Let’s say a generator is $2,900. This generator would qualify for the exemption because it is less than the
$3,000 limit. But let’s say there is a $200 delivery fee, making your total sales price $3,100. Because the total sales
price, where the generator is now more than the $3,000 limit, the
generator no longer qualifies. Sales tax is due on a total sales price of $3,100. Okay, so it sounds like consumers and
retailers as well should keep in mind any extra fees attached to the sales price
during this holiday. That’s absolutely right, Stefanie. Great. Now let’s move on to the second category: hurricane shutters and emergency or
rescue ladders priced at less than $300 Alright. Especially hurricane shutters.
This is really the time to buy them for your home or business, whether you’re
getting all new shutters or replacing damaged shutters. You really want to take
advantage during this tax-free sales tax holiday weekend. Oh, yes. I completely agree. Hurricane shutters can really add up, depending on how many windows you may have. Now, you also mention emergency or rescue ladders priced at less than $300.
What exactly are these kinds of ladders? Emergency ladders, or rescue ladders,
include collapsible or chain ladders designed to hang from a windowsill. Okay. So, this exemption does not include just any kind of a ladder, like a stepladder
or an extension ladder. That’s correct, Stefanie. It must be
collapsible or a chain ladder. Sometimes they are labeled as a fire-escape ladder. Got it. Alright. Now, on to our last category: items less than $75. Now, earlier you mentioned batteries as one of these qualified items. Does that apply to all
batteries, because I’ve been meaning to replace the battery to my laptop for
some time now. Would this type of battery qualify? No, Stefanie. Unfortunately, that
is not the type of battery that qualifies. Only batteries that are sold in a single or multipack of triple-A cell, double-A cell, C cell, D cell, six volt or nine volt qualify. Well, I guess I’m not too familiar with the qualified items in this third category, so can you tell me some other items that are exempt
if they are less than $75. There is actually a lot. Let me just mention the most popular: can openers that are non-electric; coolers and ice chests for food storage (again, these are non-electric); fire extinguishers; first aid
kits; fuel containers; round anchor systems; and tie-down kits; portable light sources, such as candles, flashlights and lanterns; portable radios,
including two-way and weather-band radios; and tarps and other plastic sheeting. Now, to purchase these items tax-free, do consumers have to provide
anything to the sellers, like maybe an exemption certificate? No, they do not. Consumers who purchase qualified items during the emergency preparation
supplies sales tax holiday on Saturday, April 27, through Monday, April 29, do
not need to provide the seller an exemption certificate. Well what happens if the seller accidentally charges sales tax on a qualified item? For example, let’s say I go to the store on that weekend and stock up on double-A
batteries, and later I see on my receipt they charged me sales tax. What do I do? I’m glad you asked that. If a seller charges you tax on the sale of a
qualifying item during the sales tax holiday, you can request a refund. We do
have our sales tax refund webpage that talks about how you can request a refund,
but in general, the webpage tells you first to ask the seller for a refund. If
the seller would rather you request a refund through the Comptroller, then the
seller may elect to assign its rights to the refund to you the purchaser, which
allows you to request a refund directly from the Comptroller by filling out
Form 00-985 Assignment of Fight to Refund. And I do know that’s a lot of
information, but keep in mind this is all available online on our
sales tax refund webpage. Okay, so let’s recap. We’ve talked about items that qualify for the
exemption, and we’ve talked about refunds if you happen to pay sales tax in error.
But what about items that do not qualify for exemption during the sales tax
holiday. Items that do not qualify during the sales tax holiday are repair/replacement parts for emergency preparation supplies; batteries for automobiles,
boats and other motorized vehicles; camping supplies; and plywood. Also services performed on or related to emergency supplies. What do you mean, Jerry? Well, Stefanie, let’s say you have to buy a replacement part or get a repair done on one of your qualified items, like that generator you
were talking about. The item is exempt, not any repairs or replacement parts on
that item. Okay. I understand now. Now, where can listeners find more information on the emergency preparation supplies sales tax holiday? They can visit the Comptroller’s website at Comptroller.Texas.Gov, check out publication 98-1017 and, of course, watch our 2019 emergency preparation
supplies sales tax holiday video. Great! I’ll be sure to add those web links to the podcast description on our Tax Training Resources webpage. Thank you, Jerry, so much for taking the time to go over all of this helpful information with me today. Thank you so much, Stefanie, for having me. It was a real pleasure. And thank you to our listeners for checking out today’s episode. If you
have missed any of our previous episodes and want to catch up, you can find them
listed on the Tax Training Resources webpage available on our website Comptroller.Texas.Gov. And until next time, y’all have a great day!

1 thought on “Tax Policy Podcast: Emergency Preparation Supplies Sales Tax Holiday

Leave a Reply

Your email address will not be published. Required fields are marked *