Sales Tax Holiday
Legislation passed by the 2007 General Assembly added two new Virginia sales tax "holidays" to the calendar for retail dealers and consumers—a four-day tax exemption holiday for Energy Star Qualified Products in October (the first Energy Star holiday was held October 5-8, 2007); and a seven-day exemption period for Hurricane Preparedness Equipment, to be held for the first time May 25-31, 2008. Virginia's first sales tax holiday, for school supplies and clothing, was held in August of 2006 and 2007 and will continue in 2008. The sales tax holidays that will occur in 2008 are:
August 1–3, 2008
School Supplies and Clothing
Tax exempt items for this three day sale event are clothing and footwear costing $100 or less per item and school supplies costing $20 or less per item.
The sale items may be extended beyond the exempt items if the retailer pays the tax for the customer. This is essentially giving the customer a 5% discount. However due to Virginia law, retailers may only advertise that they will pay the tax for the customer during the event and 14 days before the event.
RMA members who experienced the best sales results during the 2006 event, combined the 5% tax savings with other promotional offers. The combined percentage off spurred sales and the key to success was advertising to the customer that the store was participating in the "TAX FREE DAYS". The driving force for customers was that they did not having to pay the tax.
The Department of Taxation will post guidelines on their web page answering many questions; however if you have questions please call George Peyton at (804) 662-5505 or email gpeyton@retailmerchants.com.
October 10–13, 2008
Energy Star Qualified Products
During this four-day holiday, purchases of products meeting the Energy Star qualifications, such as certain energy-efficient appliances, will be exempt from the Virginia sales tax. Eligible products must be priced at $2,500 or less for each item, and be purchased for noncommercial home or personal use.
In addition, dealers may choose to absorb the sales and use tax on nonqualifying items sold during any of the holiday periods described above.
For additional information about all three sales tax holidays, including guidelines, FAQs, and lists of eligible items for each of the Virginia sales tax holidays, visit the Sales Tax Holiday Information Center.
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