In an effort to ease the purchase pain of back-to-school shopping, 12 states celebrated sales tax holidays the weekend of Aug. 3. You might be kicking yourself, however, if you didn’t buy all the back-to-school items you needed over the holiday, forgot the tax relief was happening, were away on vacation, or just live in a state with a penny-pinching tax collector.
Whatever the reason for your angst, you don’t need to be rankled every time you make a purchase and grimace at the price on the receipt. We break down how to shop tax-free online and explain the one large disclaimer that you need to know.
The Internet and Sales Tax
Sometimes you get charged with sales tax for online purchases and sometimes you don’t. Changing this convoluted tax system is currently being hotly debated in Congress, but since you probably need to get the kids their gear sooner rather than later, Congress’ wishes will have to wait. Right now, you are charged sales tax at the point of sale by the retailer if you live in a state where the retailer has a physical presence.
It is important to understand that even if you buy from an out-of-state retailer who does not charge you sales tax, you are not completely clear of this charge. A corresponding use tax, assessed at the same rate as the sales tax, is supposed to be self-reported with the rest of your taxes. Deferring this cost to later in the year, however, can really help if you’re one of the millions of Americans that carry a substantial credit card balance. But the most likely scenario is that it “slips your mind” to self-report, like the vast majority of buyers who never actually pay this tax.
The bottom line is that shopping online is not actually tax-free. But until the government gets its act together, you most likely won’t be penalized for not paying. With that in mind, we take a look at some online back-to-school deals you can also get tax-free at the point of sale.
Newegg only charges sales tax in California, New Jersey, and Tennessee. If you’re not from one of these three states, you can browse the site’s substantial inventory without being charged any sales taxes on your purchase. Newegg has everything from a nice selection of laptops and electronics for the older kids to binders and pencils for the younger children that still write by hand.
Shoebuy charges sales tax only to residents of New York state. If you’re looking to outfit the kids with a new pair of shoes after watching their feet grow exponentially in the past year, this is a prime place to do so. With a huge stock of merchandise, you’re bound to find something wearable here.
3. Shop Indie and Save
The great thing about buying at small independent online retailers is that they likely don’t have a physical presence in many states. Many small stores only have a presence in one state, and with that in mind, shops like the Tie Dyed Shop probably won’t charge you sales tax. Tie dye products are fun and unique for the kids, and the tie dye backpacks are quite cool. Don’t forget to use the store’s online coupons as well to save more cash.
4. Click N Kids
If you’re afraid your child might have lost an academic step or two at summer camp, try out some learning software from the folks over at Click N Kids. With phonics and spelling programs, this store’s products could be a great buy to keep your kids engaged in learning even after the school bell sounds. As another smaller online retailer, this store says on its website that it never charges tax or shipping.
This retailer specializes in stock and user-customized trendy products, with everything from sweatshirts to car accessories. Teenagers will love the “shop by topic” approach, allowing them to easily browse funny t-shirts, and parents will love the limited time 30 percent back-to-school sale.
Tim Chen is the CEO of NerdWallet, an unbiased credit card comparison website dedicated to helping you find the best credit cards.