Editor’s note: This is a guest post by Mark Faggiano, founder and CEO of TaxJar

Fall school shopping is fast approaching. And that means many states have “sales tax holidays.” As a consumer, tax-free weekends are a fantastic way to stock up on clothing, school supplies and even equipment like computers without paying sales tax. But as a seller, they can be a little confounding. In this post I’ll go over what Amazon sellers need to know about tax-free weekends.

What are sales tax holidays?

The terms “sales tax holiday” and “tax free weekend” are often used interchangeably, though some sales tax holidays actually take place for up to a week.

No matter what you want to call it, a sales tax holiday is a period of time where sales on some items are not taxable. The ‘back to school’ tax-free weekend is perhaps the best known type of sales tax holiday. Some states have sales tax holidays on everything from energy efficient appliances to hurricane preparedness items.

In some states, retailers are obligated to participate in the sale tax holiday. In other states, individual retailers or local areas, such as counties or cities, are allowed to opt out of the sales tax holiday.

Of course, opting out of a sales tax holiday may lead shoppers to other stores, where the sales tax holiday is in effect.

Here is a list of all sales tax holidays in 2016.

Sales Tax Holidays and Selling on Amazon

Amazon has a robust sales tax collection engine. This means that if you sell on Amazon, you don’t have to worry about manually turning off sales tax collection over the sales tax holiday. Amazon will do this for you, as long as you’ve done one key thing:

Set up your Amazon product tax codes

When you set up your sales tax collection on Amazon or enter a SKU, you also have the opportunity to enter a “product tax code.”

Product tax codes tell Amazon that your product may be taxed differently in some states or local areas. For example, some states consider clothing nontaxable, or taxed at a reduced rate, while others tax clothing at the full combined sales tax rate.

Using the product tax code A_CLTH_GEN lets Amazon know that that item is clothing. If you are collecting sales tax from buyers in states where a sales tax holiday on clothing is taking place, Amazon will know to omit sales tax from that sale.

You can see a list of all Amazon product tax codes here. And for more on product tax codes, check out our Product Tax Code FAQ.

Sales Tax Holidays and Other Platforms

If you have your own shopping cart or marketplace, the TaxJar SmartCalcs sales tax API also handles sales tax holidays.

Unfortunately, many other platforms aren’t as robust as Amazon when it comes to dealing with sales tax holidays. If your platform doesn’t handle sales tax holidays, you have a few options, none of which are absolutely ideal:

• Change tax settings on each item in your store subject to the sales tax holiday
• Turn off sales tax collection in your store for the time period the holiday takes place – This can be difficult if you sell a mix of items that are taxable and others that are subject to the sales tax holiday
• Ignore the holiday – On the downside, some states (like Virginia) consider it unlawful to ignore a sales tax holiday
• Collect sales tax from your buyers on each sale then issue a refund for the sales tax collected

Have you found another way to deal with sales tax holidays? Do you have another question? Let us know in the comments!