MONTGOMERY, Ala. — Alabama shoppers will find more opportunities to save during this year’s Back-to-School Sales Tax Holiday after lawmakers approved higher spending limits on many tax-exempt purchases.
The annual tax holiday began Friday and runs through Sunday, allowing consumers to purchase qualifying items without paying Alabama’s 4% state sales tax. More than 300 cities and counties are also participating by waiving local sales taxes.
The holiday applies to qualifying purchases of clothing, school supplies, books and computers.
“Shoppers are getting back out. They start preparing for the school year. It’s an opportunity for stores to welcome them back in,” said Brittany Peters of the Alabama Retail Association.
The biggest change this year stems from legislation approved by lawmakers in 2025 that increased the price limits on many qualifying purchases and tied future adjustments to inflation.
Under the new limits, the following purchases qualify for the tax exemption:
- Clothing and shoes priced at $156 or less (up from $100)
- School supplies priced at $78 or less (up from $50)
- Computers and related equipment priced at $1,173 or less (up from $750)
- Books priced at $47 or less (up from $30)
- Textbooks priced at $78 or less (up from $50)
“Things cost more than they used to, and the legislature recognized that and increased those caps this year,” Peters said. “Moving forward, they’ll adjust based off the CPI, the Consumer Price Index. So hopefully we won’t ever be in a predicament again where these numbers don’t reflect what customers are paying at the register.”
Retailers say the holiday remains one of the most important shopping weekends of the year.
Brian Schroll, owner of Name Dropper in Montgomery, said the tax holiday consistently brings additional customers through the door.
“We get a lot more foot traffic this weekend and people buying,” Schroll said. “It helps, especially with stuff going up recently, and it helps the consumer.”
Peters said the benefits extend beyond shoppers looking to save money.
“This is like Christmas in July for our local retailers,” Peters said. “They provide local jobs and reinvest in the community. So it’s always important for us to remember to shop there and keep our local revenue.”
The Back-to-School Sales Tax Holiday continues through Sunday, and shoppers do not have to be students or parents to take advantage of the savings on qualifying items.
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