Sales Tax Holiday

Sales tax holidays are designated periods of time when states allow for the purchase of certain items to be exempted from the sales tax.  Since 2007, Oklahoma shoppers are allowed to buy clothing items under $100 free of state and local sales tax during a three-day period beginning at 12:01 AM on the first Friday in August and ending at midnight on the following Sunday. The cost of the holiday in lost state tax revenue was $8.5M in FY 2024, according to Oklahoma Tax Commission estimates.

Eighteen states had sales tax holidays on the books in 2025, with most, like Oklahoma’s, timed to coincide with the start of the school year. They tend to be popular with consumers, who often flock to stores to take advantage of sales timed to coincide with the holiday. However, sales tax holidays are criticized by tax policy experts from across the ideological spectrum — for example, the Tax Foundation and the Institute on Taxation and Economic Policy — as costly gimmicks that primarily shift the timing of sales while creating substantial administrative burdens and costs for retailers and state revenue departments.