Mississippi and Tennessee sales tax holidays start July 27

Mississippi and Tennessee are temporarily waiving sales tax for certain products starting July 27, 2018. During the two states’ annual sales tax holidays, certain products are exempt from state and local sales taxes.

Although there are similarities between the two tax-free periods, there are some key differences, too. For example, while Mississippi’s holiday runs from 12:01 a.m. on July 27 through midnight on July 28, Tennessee’s runs from 12:01 a.m. on July 27 until 11:59 p.m. on July 29. In addition, Tennessee provides an exemption for many more products than Mississippi provides.

During its annual sales tax holiday, Mississippi exempts qualifying clothing and footwear priced less than $100. The exemption does not extend to rentals or layaways of clothing and footwear. Additional guidelines are explained here.

Tennessee exempts clothing and footwear costing $100 or less. (Note the subtle distinction between the two states’ thresholds: “less than $100” versus “$100 or less.”) Tennessee also exempts the following:

• Computers priced $1,500 or less (excludes software)
• School and art supplies priced $100 or less

Another distinction between Tennessee and Mississippi is that layaways qualify for the exemption in Tennessee. The exemption applies if the final payment is made during the sales tax holiday, and if an item was placed on layaway during the tax-free period, even if final payment is made afterward.

Additional details are available here.

If you collect and remit tax in both states, you need to be sure to properly apply sales tax — or not — to each transaction. Using tax automation software makes the task much simpler and increases accuracy. Learn more.