Sales tax holiday encourages Texans to prepare for natural disasters during pandemic

The new coronavirus (COVID-19) has triggered states of emergency around the country and globe. Like most Americans, Texans are living under a stay-at-home order and many nonessential businesses are closed or offering reduced services. Nonetheless, the state’s Emergency Preparation Supplies Sales Tax Holiday will take place as scheduled this weekend.

A variety of emergency preparation supplies are temporarily exempt from state and local sales tax during this tax-free period. These include, but aren’t limited to:

• Portable generators priced less than $3,000
• Emergency ladders and hurricane shutters priced less than $300
• Fire extinguishers, first aid kits, and tarps priced less than $75

Products that don’t qualify for the exemption include:

• Camping stoves
• Disinfectants or bleach wipes
• Face masks
• Toilet paper

The Texas Comptroller is encouraging Texans to follow good social distancing practices during the upcoming sales tax holiday. These include shopping online or by phone. If shopping in person at a local retailer, consumers should do their best to practice the social distancing guidelines described by the Centers for Disease Control.

Eligible items purchased online, by phone, or otherwise (i.e., not in store) qualify for the sales tax holiday if:

• The item is delivered to and paid for by the customer during the sales tax holiday; or
• The customer orders and pays for the item and the retailer accepts the order for immediate shipment during the sales tax holiday — even if the delivery is made after the exemption period.

An order is considered “accepted” by a retailer when the retailer has “acted to fill the order for immediate shipment.” Thus, an order on backorder or temporarily out of stock may still qualify.

Like in-state sellers, out-of-state sellers that are registered and normally collect Texas sales tax should comply with the sales tax holiday and not charge tax on qualifying sales. If your not sure whether your business has an obligation to collect Texas sales tax, check out our free sales tax risk assessment.

Many Texans will likely stay home and shop online because of COVID-19, so it’s important to remember that delivery, handling, shipping, and transportation charges are considered part of the sales price in Texas. Since all items that qualify for the sales tax holiday are subject to price restrictions, shipping and delivery charges could affect whether an otherwise eligible item qualifies for the temporary sales tax exemption.

For example, an emergency ladder priced at $295 would qualify if there is no delivery, handling, or shipping fee. Add a $10 delivery charge, however, and the total sales price of $305 exceeds the $300 price restriction; the sale would therefore not be exempt.

The Texas sales tax holiday for emergency preparation supplies starts at 12:01 a.m. on Saturday, April 25, and concludes at midnight on Monday, April 27. For more details and information about other states’ sales tax holidays, see 2020 sales tax holidays.