Sending kids back to school impacts the average family’s budget. The cost of items required for kids to go back to school can add up quickly. The good news is that, in 2006, Alabama passed a law creating an annual back-to-school sales tax holiday during the third weekend of July. This year, no sales or use taxes are required on certain items from 12:01 a.m. Friday, July 18, until midnight Sunday, July 20.

Average School Costs

In the US, families with elementary school children spent an average of $874.68 on shoes, clothing, school supplies, and electronics in 2024, according to the National Retail Federation’s (NRF) annual survey. That figure was down from $890.07 in 2023, but it was still the second-highest average in the survey’s history. The NRF estimates savings of up to 10 percent on back-to-school items in some areas of Alabama.

To offset these costs, the Alabama Department of Revenue provides a complete list of items covered under the back-to-school sales tax holiday. Municipalities and counties may join the state in eliminating any local taxes on these items if they pass a resolution or ordinance at least 30 days before the holiday. Here is a list of participating municipalities and counties in Alabama.

Shopping in July

According to the NRF, families usually begin their back-to-school shopping in July. While online retailers have recently promoted summer sales, about 86 percent of families still need to purchase more than half of their supplies.

In 2024, for example, households spent a total of $39 billion on back-to-school items. This significant spending is a great potential boon for local businesses. The Alabama Retail Association encourages local shopping by promoting the hashtag #ShopAlabama. Shopping locally helps to keep businesses in communities open and people employed.

While the holiday is designed to alleviate the cost of back-to-school shopping, families with school-aged children are not the only beneficiaries. All consumers can use the holiday to save on listed items.

Check the List

Do not be surprised if some of the items on school supply lists are not tax-exempt during the holiday. For example, many lists require tissues and wipes. However, these items are not allowed by law and are not included on the eligible item list.  A school supply, according to the law, is one of 27 specific items commonly used by a student in a course of study. Again, here is the complete list of covered items.

Visit the Alabama Department of Revenue for more information.