NEOLA, Iowa (KMTV) — Iowa's back-to-school tax holiday happens this weekend, but the tax breaks may not be as beneficial as many neighbors might think.
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The tax holiday means no sales tax on shoes and clothes under $100 on Friday and Saturday, providing some relief for families and potentially boosting business for local retailers.
"Either have it like a week long or have it two weekends. Have a full weekend, maybe a Saturday-Sunday," said Jayme Busch, a mother of three girls and owner of Unique Boutique in Neola.
The tax break has limitations that might surprise shoppers. For instance, it doesn't include essential school supplies.
"We all call it the 'back-to-school' sales tax holiday but it only accounts for clothing and shoes and those items must be under $100," said Sarah Curry, research director at Iowans for Tax Relief Foundation.
For Curry, the issue is about the overall efficiency of Iowa's tax structure.
"It actually just complicates the tax code and makes things difficult for business owners," she said.
Iowa's first tax holiday was in 2003. While Missouri has implemented a similar program, other neighboring states don't.
Curry, who has three young children, points out that parents can't always time their purchases to coincide with the tax holiday.
"When their feet grow, you have to buy shoes then and there," she said.
Despite the limitations and the extra paperwork, Busch can see the upside.
"We're thankful for it. We don't ever, especially a small business, we don't ever want to say we're not because it does drive some extra traffic if, you know, some families depend on that weekend," Busch said.
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