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The state tax holiday idea is spreading as the economic turmoil saps the income of middle-class Americans. The idea is that a state picks a day or more on which it waives state sales tax on purchases of selected types of goods. Some states use it as a carrot to encourage purchases of more environmentally friendly goods, such as Vermont's tax holiday for the purchase of Energy Star appliances. Many times the holiday is timed so that parents shopping for back-to-school clothes and electronics can save a few bucks. Georgia waives taxes on a computer purchases made on the first few days of August, while North Carolina extends the break to clothes, sports equipment, and school supplies.

At present, over a dozen states have some form of tax holiday. Smart Money has compiled an excellent list of states, dates, and what the tax break covers. Most of the holidays occur in the very near future, so make your plans today.

A caveat: while these states waive their sales tax, local taxes are not necessarily included. Smart Money makes a particularly clever suggestion for those residing in tax holiday states- any purchases of covered items they make on that date online, even from firms in other states, should also be free of state sales tax. You may, however, have to wrangle with those companies to receive this break, as it falls outside of the normal routine.


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