Everything Every Ecommerce Seller Should Know About Sales Tax Holidays

You need to be aware of how temporary tax-free periods may impact your sales tax compliance if you plan on selling into any one of the 18 states that have a sales tax holiday for 2021, plus Puerto Rico. Sales tax holidays were once only for in-state companies. However, they can also affect online sellers who are not physically present in the state. This can lead to problems with sales tax compliance.

There are many traps you should avoid when selling into a sales tax-holiday state.

  • Time for the start and the end.
  • Participation options
  • Qualifying products
  • Prices subject to restrictions
  • Exchanges and returns
  • Shipping and handling

End Times

At least 31 sales tax holidays are expected to be offered by 18 states and Puerto Rico in 2021. Other states may decide to offer the same but that seems increasingly unlikely.

Summer is the peak of the sales tax holiday season. However, they can be run at any time. The first two tax-free periods of 2021 were in February. The last one will occur after Thanksgiving in New Mexico.

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