Most US states consider clothing a taxable item, but – just like with anything sales tax related – there are plenty of exceptions to the rule. A handful of states consider clothing tax exempt, but with caveats. Others differentiate between clothing for everyday wear and formal clothing. Let’s dive into the fragmented world of charging sales tax on clothing.
Charge sales tax on clothing? Usually.
All but seven US states consider clothing for everyday wear to be taxable items. So if you sell a pair of jeans to a customer in Florida or Oklahoma, charge sales tax as normal. But if you’re a clothing retailer, don’t just charge sales tax to every customer and call it a day.
Some states differentiate between clothing for everyday wear and categories like protective clothing, sports related clothing (such as uniforms or protective gear) or formal wear. Some states even go further and differentiate clothing made from real animal fur into its own (generally always taxable) category.
If you sell clothing, we recommend double checking with the state taxing authority in each state where you have sales tax nexus to ensure you are charging the right amount of sales tax (or not charging sales tax) in accordance with state guidelines.
States where clothing is tax exempt
Seven states, most of them in the northeastern US, don’t consider clothing taxable. …At least, in most cases.
Massachusetts considers clothing tax exempt as long as it sells for less than $175 per item or pair. However, certain clothing and footwear designed for athletic activity or protective use are taxable.
Similarly, New York considers clothing selling at less than $110 per item or pair to be tax exempt, but that same article of clothing is sometimes only exempt from New York state sales tax and will still be subject to local sales tax. We detail New York’s clothing sales tax exemption here.
Minnesota, Pennsylvania, New Jersey, Rhode Island and Vermont also consider most clothing tax exempt, but each state has their exceptions. Find your state in our “Sales Tax by State: Is Clothing Taxable?” guide for more information about clothing taxability in the state.
Other clothing taxability considerations
To confuse matters further, some states, like Connecticut have a “luxury tax” on certain clothing. (In Connecticut’s case, that’s clothing priced at more than $1,000.) Fur, another luxury, is generally always subjecto tax.
Protective clothing is generally always taxable, too, even in states like Minnesota that otherwise consider most clothing tax exempt.
A few other states have the odd one-off exemption. For example, a handful of states like California and Tennessee support tax exemptions for nonprofit and thrift stores when providing clothing to those in need. And clothing used in motion pictures may be exempt in Mississippi.
And last but not least, clothing is often subject to sales tax holidays. As a retailer, make sure you don’t charge sales tax on clothing during periods when it is tax exempt (usually in the spring or around back to school time in the fall) in order to keep customers happy and adding more to their carts.
How to stay sales tax compliant as a clothing retailer
If you sell clothing, this may seem overwhelming. But TaxJar has your back. Here’s how to get compliant:
- Determine where you have sales tax nexus. Sales tax nexus is just a fancy way of saying where you are required to collect sales tax.
- Charge the correct rates. Determine in which states you are required to charge sales tax, and into which categories your clothing products fall. (Remember, fur is generally always taxed while blue jeans can be taxed differently in different states.) The TaxJar API has your back here. Just categorize your products once and TaxJar will ensure you collect the right amount of sales tax on every item, every time.
- Aggregate your sales channels. Make sure you’re compiling sales data from every sales channel and be aware of marketplace facilitator laws by state to properly collect and remit taxes.
- File your returns. In the states where you’re registered, be sure to know your due dates, submit your returns and remit any payments necessary.
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