CHARLESTON — Guidance has been issued by the West Virginia State Tax Department about the upcoming back-to-school sales tax holiday that will begin at 12:01 a.m. July 30 and end at midnight Aug. 2.
Answers to frequently asked questions include concerns about items that qualify for the sales tax holiday; how the exemption applies to clothing items sell for $125 or less; the types of items qualifying as clothing and school supplies; and exemption eligibility for items purchased for businesses.
There is no limit on the amount of the total purchase. The qualification is determined by each individual item. Also, items purchased for use in a trade or businesses are not exempt under the sales tax holiday.
Another frequently asked question is, “Does the exemption apply to mail, telephone, e-mail, and internet orders?”
According to the West Virginia State Tax Department, qualified items sold to consumers in West Virginia by mail, telephone, e-mail or internet shall qualify for the sales tax exemption if the consumer orders and pays for the item and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period.
“However, if the order and payment were made before the sales tax holiday, even if the item is delivered during the sales tax holiday, it would not qualify for the exemption,” the guidance reads. “Additionally, if a customer requests delayed shipping or the payment does not occur until after the holiday period, the item would not qualify for the exemption.”
It goes on to say, out-of-state consumer’s ordering from retailers in West Virginia via mail, telephone, e-mail or internet are not eligible for the sales tax holiday, because sales tax is determined based upon the destination of the sale, and not where the sale originated.
“Like a lot of tax policy this appears to be complicated, but it’s also an opportunity for consumers to save some money,” said Bill Bissett, president and CEO of the Huntington Regional Chamber of Commerce. “In what we hope is a post-COVID economy, this is not only a great opportunity for shoppers but also retailers to drive business over the summer and before the start of school. The fact that online shopping opportunities are available for this sales tax holiday also helps some local businesses that have moved into that arena during the pandemic.”
A complete list of questions and answers can be found online at https://tax.wv.gov/Business/Pages/SalesTaxHoliday.aspx.
In 2019, West Virginia passed legislation to create a sales tax holiday in 2021 (H.B. 206, Laws 2019, effective July 1, 2021). The legislation provides a list of what is considered clothing, school supplies and school instructional materials in regards to the sales tax holiday.
Ohio and Michigan enacted the first sales tax holidays in 1980 when they offered one-time tax holidays for automobile purchases. But it was New York that sparked the modern trend, with the first sales tax holiday for clothing in 1997.