Iowa and Illinois Tax Breaks Begin August 7: Save on Back-to-School Shopping

Back-to-school shopping season is here, and families across the Quad Cities have a chance to save money on clothes, shoes, and school supplies. However, the tax savings are different depending on whether you shop in Iowa or Illinois.

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Iowa's Tax-Free Weekend (August 7-8)

Iowa is holding its annual Sales Tax Holiday on Friday, August 7, and Saturday, August 8.

During those two days, shoppers won't pay any state or local sales tax on qualifying clothing and footwear that costs less than $100 per item.

The $100 limit applies to each individual item, not your total purchase. For example, you could buy several shirts, pairs of pants, or shoes without paying sales tax, as long as each item is priced under $100.

If one item costs $100 or more, that item does not qualify, and you'll pay sales tax on the full price.

What Qualifies in Iowa?

Tax-free items include everyday clothing and shoes such as:

• Shirts
• Pants
• Dresses
• Coats
• Socks
• Shoes
• Sandals

Items that DO NOT qualify include:

• Jewelry
• Watches
• Handbags
• Umbrellas
• Sports equipment
• Cleats
• Rollerblades
• Protective sports gear
• Other athletic equipment

Online purchases can also qualify, as long as you place and pay for the order during the tax holiday, even if it arrives later.

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Illinois Tax Savings Last Longer

Illinois is also offering back-to-school tax savings, but it works differently.

Instead of eliminating sales tax, Illinois is lowering the state's sales tax rate on qualifying purchases from 6.25% to 1.25% beginning August 7 through August 16.

Keep in mind that local sales taxes still apply, so shoppers won't receive a completely tax-free purchase.

What Qualifies in Illinois?

Illinois includes:

• Clothing and footwear priced under $125 per item
• School supplies for students

Unlike clothing, school supplies do not have a price limit.

Qualifying school supplies include items such as:

• Backpacks
• Notebooks
• Paper
• Pens and pencils
• Crayons and markers
• Binders
• Calculators
• Folders
• Scissors
• Rulers
• Lunch boxes

Items like jewelry, handbags, wallets, sunglasses, cleats, ballet shoes, sports equipment, and protective gear are NOT included in the tax break.

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Which State Offers the Better Deal?

For Quad Cities shoppers, it depends on what you're buying.

If you're shopping in Davenport, Bettendorf, or elsewhere in Iowa, you'll pay no state or local sales tax on qualifying clothing and shoes under $100, but only during the two-day tax holiday.

If you're shopping in Moline, Rock Island, East Moline, or elsewhere in Illinois, you'll have 10 days to take advantage of the savings. While you'll still pay local taxes, Illinois includes school supplies and allows clothing and footwear up to $125 per item to qualify.

Before you head to the checkout, it's worth checking the price of each item and whether it qualifies. The rules are different in each state, so where you shop could make a difference in how much you save this back-to-school season.