Alabama Sales Tax Holiday for Back-to-School

Alabama’s annual back-to-school sales tax holiday provides a temporary reprieve from sales tax on specific categories of goods. The event is designed to help families manage the costs associated with preparing for the school year. For 2025, the tax-free period begins at 12:01 a.m. on Friday, July 18, and concludes at midnight on Sunday, July 20. During this window, the state’s 4% sales tax is waived on qualifying items.

Qualifying Items and Price Limits

Clothing

The sales tax exemption applies to individual articles of clothing with a sales price of $100 or less. This includes most human-wearing apparel suitable for general use, such as shirts, pants, dresses, and coats. The exemption is determined on a per-item basis, meaning a customer can purchase multiple eligible clothing items in a single transaction, as long as each individual item does not exceed the $100 threshold. Also included under this category are diapers, both cloth and disposable. Footwear, such as shoes, sandals, and boots, also qualifies for the exemption, provided the price per pair is $100 or less.

Computers

The exemption covers a computer, tablet, or printer with a selling price of $750 or less. For a computer to qualify, it must be sold as a package that includes the central processing unit (CPU) along with essential peripherals like a monitor, keyboard, and mouse. Laptops and tablets, which have these components integrated, inherently meet this requirement. Individual computer parts or devices not sold as part of a bundled system do not qualify for the exemption. The $750 limit applies to the total price of the qualifying computer, tablet, or printer.

School Supplies

General school supplies with a sales price of $50 or less per item are exempt from sales tax. Examples include pens, pencils, notebooks, binders, paper, crayons, markers, and folders. The exemption also extends to art supplies like watercolors and drawing pads. To qualify, each individual school supply item must be priced at or below the $50 limit. For instance, a consumer could purchase a backpack and a scientific calculator in the same transaction, and both would be tax-exempt as long as neither item individually costs more than $50.

Books

The sales tax holiday includes an exemption for books with a sales price of $30 or less per book. To be eligible, the book must be a set of printed sheets bound together and published in a volume that has been assigned an International Standard Book Number (ISBN). This definition covers most textbooks, workbooks, and reading books that students might need. The exemption does not apply to magazines, newspapers, periodicals, or any other printed matter that does not meet the specific definition of a book.

Non-Qualifying Items

Clothing accessories are not exempt from sales tax. This list includes items such as jewelry, handbags, purses, briefcases, luggage, umbrellas, wallets, and watches. Protective equipment like breathing masks, hard hats, and helmets are also taxable.

Similarly, while computers are exempt, many related accessories and supplies are not. Taxable items in this category include computer software, video games, and peripheral devices when sold separately from a CPU package. Furniture, such as a computer desk or chair, is also taxable.

Consumable supplies like printer paper and ink are only exempt if they fall under the general school supply category and are priced at $50 or less per item. Sports and recreational equipment are generally not included in the tax holiday. This means items like cleats, baseball gloves, bats, balls, and other gear used for athletic activities are subject to sales tax.

Local Government Participation

The state-level 4% sales tax is waived statewide during the holiday period, but local sales taxes are a separate matter. Municipalities and counties in Alabama have the option to decide whether they will participate in the sales tax holiday. If a city or county chooses not to participate, its local sales taxes will still be collected on otherwise qualifying items.

Because participation varies, consumers must verify the status of the specific location where they plan to shop. A shopper in a non-participating city could pay local sales tax while a shopper in a neighboring, participating city would pay none. The Alabama Department of Revenue maintains and publishes an official list of all cities and counties that have chosen to participate, and consumers are encouraged to consult this list prior to the event.

Rules for Special Purchase Scenarios

Online Sales

The sales tax exemption is applicable to online purchases, but specific timing rules apply. To qualify, an item must be ordered and paid for during the sales tax holiday period. The retailer must also accept the order during this timeframe. The delivery date does not affect the tax exemption, so an item ordered during the holiday can be delivered afterward and still be tax-free.

Layaway Sales

Items sold on layaway are eligible for the sales tax exemption under a specific condition. The final payment on the layaway order must be made during the sales tax holiday. If the final payment is made before or after the designated weekend, the purchase is subject to sales tax.

Coupons and Discounts

The use of coupons and discounts can affect an item’s eligibility. The sales price that is subject to the price thresholds is the final price after all discounts and coupons have been applied. For example, if a jacket is originally priced at $110 but a 10% discount brings the final sale price to $99, the item qualifies for the sales tax exemption.

Rain Checks

For sales tax holiday purposes, a rain check is not sufficient to secure the tax exemption. The item must be purchased and paid for during the holiday weekend. If a customer uses a rain check to buy an item after the holiday concludes, the purchase will be subject to the standard sales tax, even if the rain check was issued for an item that was on sale during the tax-free period.