Virginia Senate votes to make sales tax holiday permanent

Virginians may soon be able to count on a permanent sales tax holiday for school and emergency preparedness supplies in August of each year.

The sales tax holiday first became official in Virginia in 2006, and Democratic legislation to extend the sales tax break was passed in 2017. The original legislation had a sunset date of July 1, 2022.

Efforts to extend the holiday last year were overshadowed by other General Assembly matters, and no sales tax holiday was held in August 2023. An eventual temporary fix was included in the overdue budget amendments that passed last September, kicking the weekend of sales tax relief for certain school and other items to October 2023.

Democratic Sen. Louise Lucas filed legislation this year to reenact the sales tax holiday weekend and extend it through 2030, when the cost caps on qualifying items would likely need to be adjusted for inflation and other changes. The three-day holiday will begin on the first Friday of August and end that Sunday.

Two Republican senators joined Lucas to co-sponsor the measure, which passed the Senate unanimously.

Democratic Del. David Reid has filed companion legislation in the House, which will likely be voted on in the coming week.

The annual sales tax holiday is a savings opportunity that gives buyers a chance to save on everything from school supplies to emergency preparedness equipment.

The savings extend beyond in-store purchases to also include select purchases made online, by mail order, and by telephone.

Qualifying Virginia sales tax holiday items include:

• School supplies, clothing, and footwear 
• Hurricane and emergency preparedness products  
• Energy Star™ and WaterSense™ products 

A detailed list of eligible school and emergency supplies is released no later than July 15 each year.

While the list of qualifying items is substantial, there are a few restrictions. 

For school supplies, qualifying items must cost less than $20 per item. That means parents can stock up on binders, notebooks, pencils, crayons, and other often-used classroom supplies. 

As for clothing, there’s a per-item price limit of $100. Winter coats, a warm pair of boots, some new socks, and seasonal wear generally falls within that price range.

Hurricane and emergency preparedness items covered include portable generators that cost $1,000 or less, gas-powered chain saws that cost $350 or less, or other items including batteries, flashlights, two-way radios, bottled water, and first aid kits that cost $60 or less.

The Commonwealth Institute’s tax policy analyst, Megan Davis, noted that sales tax can range anywhere from 5.3% to 7% on a product, depending on locality, and helped explain the savings for Virginia families as they prepare to return their kids to school each year.

Given the per-item price limits on certain products, Virginians could save between $1.06 and $1.40 on a school supply item or between $5.30 and $7 for a piece of clothing or footwear.

While it might not seem like much per item, the savings add up quickly. For a family spending $600 per child (the approximate national average amount spent at back-to-school time) on qualifying items, that’s between $31.80 and $42 in savings per student.