Sales Tax Holiday: Use Wisely

In Iowa, this coming Friday and Saturday (Aug 3-4 2018) offers a chance to buy qualifying clothing items without paying any sales tax. For most Iowans, (depending on local sales tax), that’s a savings of 7% — not a huge windfall, but still an advantage.  That savings is magnified by the many retailers who offer clothing sales on the same weekend.

Sounds like a winning proposition, right? It can be. But like anything else, it requires consumers to use good judgment! Why?

Well, if you’re like me, you’ve had experience with the risks involved in shopping simply because there’s a sale. Who among us hasn’t made a purchase because it was such a “great deal” and then never (or rarely) used it? Hopefully we learn from those experiences, but it always pays to exercise caution when shopping sales.  Here are some ideas to help us avoid regrets:

  • Have a list and prioritize.
  • Plan a dollar limit that lets you fit your purchases into your budget without borrowing. When purchases are paid off over months of credit card payments, the benefit of the sale price quickly disappears.
  • Know what the “regular” prices are, and consider whether items will be on a bigger sale later in the fall. In other words, ask yourself “Are they just giving a small discount to tempt me to buy now rather than waiting for later when bigger discounts will be offered?”
  • Keep all receipts. If you pick something up and later decide it wasn’t that important or that great of a bargain, you’ll simply be able to return it!  Be sure to have the self-discipline to follow through on that… it may be “only” $10 or $20, but that adds up over time.
  • If you are buying for people other than yourself (especially growing children) check out their current clothing stock before you make your list — find out what fits and what doesn’t. This will help you make sure that the items on your list are the most important items.

Iowa’s Sales Tax Holiday applies to most clothing and footwear items priced below $100. Most accessories are not exempt (such as jewelry or watches), but some items do qualify for the exemption (such as scarves).  Certain specialty clothing items, such as clothing specific to a particular sport, are excluded as well. For a full list of items that are taxable vs. exempt, go to

Happy shopping! Good planning means no regrets!

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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