These states have sales tax holidays in 2025. Here’s who stands to benefit, tax experts say

Every year, a handful of states offer shoppers a temporary tax break to encourage spending. This year, some of those “sales tax holidays” are happening as President Donald Trump’s tariffs threaten to hike prices.

These holidays waive state sales tax (and sometimes local levies) on certain purchases for a set period. While eligible items vary by state, many include categories like back-to-school shopping or supplies for disaster preparedness.

“Sales tax holidays are politically popular because everyone likes tax relief,” said Katherine Loughead, a senior policy analyst and research manager with the Center for State Tax Policy at the Tax Foundation, where she has researched the topic.

But “it’s not as good a deal” as policymakers and consumers expect, she said.

More from Personal Finance:
Trump tariffs make investing ‘tricky,’ expert says
What private assets in 401(k) plans mean for investors
Ed Department launches college financial aid form sooner than expected

While sales tax holiday supporters claim the policy boosts economic growth, some research suggests that consumers simply shift the timing of their essential purchases, Loughead said.

“Wealthier taxpayers are often best positioned to benefit from a temporary exemption” because they have the flexibility to choose when to make purchases, Miles Trinidad, a state analyst for the Institute on Taxation and Economic Policy, wrote in a July blog post.

However, some middle- to lower-income families do plan for yearly sales tax holidays, particularly for bigger purchases like back-to-school shopping, experts say.

Shelly Werger, a mother of seven in Guttenberg, Iowa, says she tracked the timing of her state’s Aug. 1-2 sales tax holiday. “Everything is just getting so expensive right now that I am doing everything I can to save money here and there,” she said.

However, in Iowa, the exemption only covers clothing and footwear under $100 and not school supplies, computers or sports equipment — “we get a little bit of savings but not a lot,” Werger said.

For 2025, 19 states have held or will hold sales tax holidays, which matches the number from 2024, according to the Tax Foundation, as of July 22. 

Here’s a breakdown of the dates for 2025, eligible items and price limits.

Any money-saving opportunity, particularly ahead of the peak back-to-school shopping season, can be a benefit for families squeezed by higher costs.

A survey conducted last year by ParentsTogether, a national parenting organization, found that 75% of parents said back-to-school shopping causes significant stress, and 47% reported cutting back on food to afford school supplies.

More recently, a report from Intuit Credit Karma found that 39% of parents said they were unable to afford back-to-school shopping this year, up from 34% in 2024. Many of them started shopping earlier than usual to prepare for tariff-related price hikes and to take advantage of sales tax holidays along with other summer sales, the report found. 

“Families are kicking off their back-to-school shopping earlier this year and are keeping an eye out for key ways to save, including retailer sales and deals as well as events like tax-free holidays,” said Katherine Cullen, the National Retail Federation’s vice president of industry and consumer insights.

While skipping the state tax could save up to 7% in some places, “the even bigger impact is when you combine that discount with other savings strategies,” advised Ted Rossman, Bankrate’s senior industry analyst.

For example, “you can combine that with a store promotion — maybe they give 30% off. You could use a rewards credit card for 5% cash back. And let’s say you use an online shopping portal… for another 10% cash back,” Rossman said. “Something that would have cost you $100 (inclusive of sales tax) now might cost about half that.”