Is There Tax on Clothes? A State-by-State Breakdown

Sales tax is a common feature of consumer transactions, representing a percentage collected by retailers on behalf of state and local governments. This indirect tax is typically added to the price of consumer goods, including clothing, at the point of sale. The application of sales tax to apparel can differ significantly depending on the jurisdiction where the purchase occurs.

Understanding Sales Tax on Clothing

Sales tax, from a consumer’s perspective, is an additional charge calculated as a percentage of the purchase price of an item. Retailers are responsible for collecting this amount from customers and then remitting it to the appropriate government tax authorities. Clothing, as a tangible personal property, generally falls within the scope of items subject to sales tax in most jurisdictions across the United States. This mechanism ensures that states generate revenue from retail transactions to fund public services.

State and Local Sales Tax Variations

The landscape of sales tax on clothing varies considerably across the United States, reflecting diverse state-level policies and local taxation structures. A few states do not impose a statewide sales tax, meaning clothing purchases in these locations are exempt from state sales tax. Such states include Delaware, Montana, New Hampshire, and Oregon. Alaska also lacks a statewide sales tax, though local jurisdictions within the state may impose their own sales taxes on clothing.

Several states provide a full exemption for clothing from sales tax, recognizing apparel as a basic necessity. These states include Minnesota, New Jersey, Pennsylvania, and Vermont.

Some states implement a partial exemption, where clothing is exempt only up to a specific price threshold. For instance, in Massachusetts, clothing items priced at $175 or less per item are generally exempt, with sales tax applying only to the amount exceeding $175 for more expensive items. New York offers a similar exemption for clothing and footwear costing less than $110 per item, though the entire price becomes taxable if it meets or exceeds this threshold. Rhode Island exempts clothing up to $250 per item, taxing only the amount above that cap.

Beyond state-level taxes, local sales taxes imposed by counties, cities, and special districts can further complicate the total amount paid on clothing. These local taxes are added on top of state sales tax rates, leading to varying combined rates even within the same state. For example, in Illinois, a statewide sales tax rate applies, but local taxes can increase the combined rate significantly, such as in Chicago. These layered tax structures mean that the total sales tax rate on an item of clothing can differ considerably from one locality to another.

Clothing Sales Tax Exemptions and Holidays

Beyond the general state-level policies, specific types of clothing can be exempt from sales tax, or temporary exemptions may be offered during designated periods. Some jurisdictions provide exemptions for certain functional or specialized apparel.

A common and widely anticipated form of temporary exemption is the sales tax holiday. These events typically occur annually, often in late summer to coincide with back-to-school shopping. During a sales tax holiday, certain clothing items, usually within a specified price limit, are temporarily exempt from sales tax. Many states, including Alabama, Arkansas, Connecticut, Florida, Maryland, Mississippi, Missouri, Ohio, South Carolina, Tennessee, Texas, and Virginia, offer these holidays.

The specific items and price thresholds for these holidays vary by state. For example, during Florida’s back-to-school sales tax holiday, clothing and footwear priced at $100 or less per item are exempt. Missouri’s sales tax holiday for clothing also applies to items priced $100 or less.

Sales Tax on Online Clothing Purchases

The application of sales tax to online clothing purchases has evolved significantly, largely influenced by changes in tax regulations for remote sellers. The concept of “economic nexus” now mandates that many online retailers collect sales tax based on their sales volume or transaction count into a state, regardless of physical location.

Another development is the widespread adoption of “marketplace facilitator” laws. These laws require large online marketplaces, such as Amazon or Etsy, to collect and remit sales tax on behalf of third-party sellers who utilize their platforms. The same state and local sales tax rules, including any exemptions or price thresholds that apply to in-store purchases, generally extend to online clothing purchases. The sales tax applied to clothing is determined by the specific rules of the buyer’s shipping address.