The statute provides an alternative for retailers when less than two percent of their merchandise offered for sale qualifies for the sales tax holiday.  The sales tax holiday doesn't apply to those retailers, but they must offer a refund of tax to customers who purchase qualifying sales tax holiday related items.

If you do not sell any of the qualified items, you will collect and remit sales tax as usual.

You will collect from your customers only the local jurisdiction's sales tax on the sale of holiday related items.  You do not collect state sales tax on the sale of holiday related items.  Report holiday sales on a separate line for each business location.

Excerpt from Department of Revenue's Sales Tax Holiday Information for Vendors

Below is an example of how the return should appear if one or more of your local taxing authorities does not participate in the sales tax holiday.

Total sales for the tax period were $3000.  Of the $3000, $1000 was received for qualifying school supplies.  Because the local taxing authorities are not participating in the holiday, the tax rate applied against the $1000 in sales is 2%.  (The normal tax rate for the area in this example is 6.225%, of which 4.225% is the state tax rate.  In order to find the reduced rate the customer should be charged, use the following formula: 6.225 - 4.225 = 2.000%.)  Even though the local taxing authority is not participating, the customer still receives an exemption from the state tax rate.

Business Location	Code	Gross Receipts	Adjustments (+ Or -)	Taxable Sales	Rate (%)	Amount of Tax
123 Main Street	-	$2000.00	-	$2000.00	6.225	$124.50
Holiday Sales	-	$1000.00	-	$1000.00	2.000	$20.00

If your city, county, and taxing district are all participating in the sales tax holiday, you may use your pre-printed voucher.  Report sales of holiday related items as a negative adjustment on your return.

Excerpt from Department of Revenue's Sales Tax Holiday Information for Vendors

Below is an example of how the return will appear if all local taxing authorities are participating in the sales tax holiday.

Total sales for the month were $3000. Of the $3000, $1000 was received for qualifying school supplies. Because the local taxing authority is participating in the holiday, the holiday sales are completely exempt from tax. The customer will receive an exemption from both state and local tax for this time period.

Business Location	Code	Gross Receipts	Adjustments (+ Or -)	Taxable Sales	Rate (%)	Amount of Tax
123 Main Street	-	$3000.00	-$1000	$2000.00	6.225	$124.50

If you have not received a sales tax holiday return, you can download a blank sales tax return ( Form 53-1 ).  Report sales made on holiday related items during the sales tax holiday on a separate line from all other sales you made for each location during the tax period.  For examples on how to fill out a blank sales tax return click here.

No.  If less than two percent of your merchandise offered qualifies for the holiday rate you do not have to participate in the holiday.  However, you must provide a refund of the applicable tax to the customer on their purchase of qualifying sales tax holiday items.

No.  The sales tax holiday is for purchases of qualifying items for personal use only.