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The first Friday and Saturday of August are known as Iowa’s annual sales tax holiday or “tax free” weekend, although Sunday is not included.
This yearly holiday applies to each article priced under $100.00 regardless of how many items are bought on the same invoice. No sales tax, including local option sales tax, will be collected on sales of an article of clothing or footwear having a selling price less than $100.00. Clothing or footwear selling for more than $100.00 does not qualify.
The tax exemption does not include watches, watch bands, jewelry, umbrellas, handkerchiefs, sporting equipment, skis, swim fins, roller blades, skates, and any special clothing or footwear designed primarily for athletic activity or protective use and not usually considered appropriate for everyday wear.
Eligible items purchased by mail order, catalog or Internet will be exempt if they are:
• delivered during the exemption period, or
• ordered and paid for during the exemption period, even if delivery is made after the Sales Tax Holiday.
The sale of a gift certificate is not taxable. Eligible items sold and delivered during the exemption period using a gift certificate will qualify for the exemption, regardless of when the gift certificate was purchased.
Eligible items sold and delivered after the exemption period using a gift certificate are taxable even if the gift certificate was purchased during the exemption period. A gift certificate cannot be used to reduce the selling price of an item to under $100.00 in order for the item to qualify for the exemption.