Shop Tax Free in DC August 5-13

(Washington, DC) The District of Columbia will offer a Sales Tax Holiday beginning 12:01 am Saturday, August 5 through midnight Sunday, August 13, 2006, to provide buyers an exemption from the 5.75 percent sales tax for shoes, clothing, and accessory items. The exemption covers each item costing $100 or less.

The sales tax exemption will apply to each eligible item regardless of how many items are sold on the same bill to a customer. It will also apply to layaway sales if the retailer and customer enter into a layaway agreement or the customer makes the final payment on the layaway order during the exemption period.

Retailers filing monthly or annual sales and use tax returns should enter the total amount of tax exempted due to the Sales Tax Holiday, along with any other exempt taxes, on line 11 of the sales tax portion of the return. Retailers are also encouraged to clearly state in their records the type of item sold and the sales price of tax-exempt merchandise sold during the Sales Tax Holiday period.

The result of a legislative initiative by Councilmember Carol Schwartz, the purpose of the August tax “holiday” is to encourage families who are preparing their children for the upcoming school year to shop in the District. There will be a second Sales Tax Holiday held in November, beginning the weekend following Thanksgiving, November 24, 2006, and continuing through midnight December 3, 2006.

“I am pleased that the city is in a position to offer this tax break to families and individuals again this year,” said Mayor Anthony A. Williams. “Hopefully, we can entice people from the suburbs to do even more of their shopping in DC during our tax-free week, and I know that our DC residents will welcome the extra cash in their pockets.”

“By providing this tax break right up front – at the cash register – we make back-to-school shopping a little easier on the pocketbook for working parents, while providing an incentive for everyone to shop in the District,” said Councilmember Schwartz.