Tennessee Sales Tax Holiday

August 4, 2006 will mark the first annual sales tax holiday for Tennessee. The holiday will start each year at 12:01 a.m. on the first Friday in August and will end at 11:59 p.m. on the following Sunday. During the holiday, the following items will be exempt from sales tax:

Exempt clothing is defined as “human wearing apparel for general use.” It excludes accessories such as jewelry or bags, as well as sports and recreational equipment such as baseball gloves. An exempt school supply is defined as an item used by a student in a course of study. The definition contains an all-inclusive list of school supplies. Examples include binders, book bags, calculators, lunch boxes, markers, pens, paper, etc. The following types of items are specifically excluded from the exemption: computer software, clothing accessories, protective equipment, sports and recreational equipment, school art supplies, school instructional material, and school computer supplies. The exemption does not apply to items used in a trade or business or to items that are rented.

The state will reimburse local governments for the loss of local option sales tax on exempt holiday sales.