Texas—like many states—enjoys sales tax holidays. The state legislature sets the dates of these events and they are generally created for a specific class of products subject to the tax exemption. For example, in May 2017, Texans enjoyed an Energy Star sales tax holiday on various energy-efficient appliances. In August 2017, there was a “back to school” sales tax holiday, which exempted clothing, footwear, school supplies from sales and use taxes. Such events create ample opportunities for the businesses that are prepared to take advantage of them.
Here are some considerations for businesses that are preparing for sales tax holidays:
Prohibited Advertising: Texas law prohibits businesses from advertising that customers will not be charged sales tax on taxable items. Under the Texas Tax Code § 151.704, a retail business violates the law if it does the following:
- Directly or indirectly advertises, holds out, or states to a customer or to the public that the retailer:
- Will assume, absorb, or refund a part of the tax; or
- Will not add the tax to the sales price of a taxable item sold, leased, or rented
During a tax holiday, this means that businesses cannot indicate they will pay the tax on items that are not subject to the holiday. Retailers can, however, reduce the price of the item to accommodate the sales tax.
Business Planning: Any time there is an opportunity to increase sales, a business must be prepared for the logistical, legal, and tax implications of the endeavor. Logistical considerations include advertising and stocking sufficient inventory. Retailers can be subject to increased legal regulation or tax liability as a result of the increased sales and they must be prepared to comply with these requirements.
The Right Legal Representation for Your Texas Business
Running a business can be a stressful proposition, with no guarantee of financial returns. Attorney Andrew Weisblatt has been helping business owners access the tools for success for 25 years. offers legal, tax, and business advising for businesses of all sizes. Call (713) 714-4634 to schedule your free phone consultation with an experienced Texas business attorney today. We will help you build a successful business from the ground up.
- business law in tx