Texas Sales Tax Holidays: How to Set up Your POS for Each One

Set up your POS for every Texas sales tax holiday: 2027 dates, item lists, price limits, layaway and online order rules, and post-holiday refunds.

Adrian ReyesSenior Payments & Fintech Editor

November 10, 2026 · 10 min read

Woman in a straw hat with a black band, seen from behind, browsing shelves of colorful hats at a retail stall

Photo: Pixabay

On this page 6 sections

Texas Sales Tax Holiday Dates for 2026 and 2027
Texas Tax-Free Weekend Items and Where the Price Line Falls
Flagging Eligible SKUs in Your POS and Online Store
Layaways, Rain Checks and Online Orders
Handling Returns and Exchanges After the Holiday
Records to Keep for a Comptroller Audit

Key takeaways

The price tests differ. Back-to-school and emergency items must be priced "less than" the limit, but ENERGY STAR air conditioners and refrigerators qualify at "or less." Your POS rules need to match that exactly.
For emergency and ENERGY STAR items, delivery charges count toward the price limit. A $299 ladder with $10 delivery is taxable on the full $309.
Diapers and maternity clothing have been exempt all year since Sept. 1, 2023. They belong in a permanent exempt category, not your holiday-only group.
An online, layaway or rain-check sale is exempt only if it meets the Comptroller's timing test during the holiday window. Issuing a rain check during the holiday isn't enough.

Texas has four sales tax holidays a year: emergency preparation supplies in April, ENERGY STAR and water-efficient products over Memorial Day weekend, and back-to-school items in August. To handle each Texas sales tax holiday correctly at checkout, you need four things. First, an exempt tax category for the eligible items. Second, price rules that match the Comptroller's limits exactly. Third, a plan for online orders, layaways and rain checks. Fourth, records showing that each exempt sale happened inside the window. Below are the dates, the item lists and a setup checklist, based on the Texas Comptroller's 2026 publications (current as of November 2026).

Texas Sales Tax Holiday Dates for 2026 and 2027

The Comptroller's sales tax holiday FAQ lists all four holidays and confirms that each one falls on a weekend. Customers don't need an exemption certificate to buy at the tax-free price. The legislature sets both the dates and the item lists, according to the Comptroller's August 2026 press release.

Holiday	2026 dates	Expected 2027 dates	What qualifies	Price test
Emergency Preparation Supplies	Sat., April 25, to Mon., April 27	April 24 to 26	Portable generators; hurricane shutters and emergency ladders; other listed supplies such as first-aid kits, weather radios and flashlights	Less than $3,000; less than $300; less than $75
ENERGY STAR	Sat., May 23, to Mon., May 25	May 29 to 31	ENERGY STAR air conditioners, refrigerators, ceiling fans, incandescent and fluorescent bulbs, clothes washers, dishwashers, dehumidifiers	ACs $6,000 or less; refrigerators $2,000 or less; no cap on the rest
Water-Efficient Products	Sat., May 23, to Mon., May 25	May 29 to 31	WaterSense-labeled products; listed water-conserving products for residential property	No price cap in the Comptroller's list
Back-to-School	Fri., Aug. 7, to Sun., Aug. 9	Aug. 6 to 8	Most clothing, footwear, school supplies and student backpacks	Less than $100 per item

The 2027 dates are projections, so confirm them with the Comptroller before you schedule anything. The emergency holiday ran from Saturday through the last Monday in April in both 2025 and 2026. The ENERGY STAR and water holidays run from Saturday through Memorial Day. Starting in 2026, the Sales Tax Institute reports, a change to state law moved the back-to-school holiday to the first Friday in August through the following Sunday. Each holiday starts at 12:01 a.m. on its first day and ends at midnight on its last, according to the Comptroller's April 2026 Tax Policy News.

Houston merchants should watch the April holiday in particular, because it lands just before hurricane season. The Comptroller frames it around hurricanes, flash floods and wildfires, so hardware, outdoor and big-box sellers on the Gulf Coast tend to feel it most.

Texas Tax-Free Weekend Items and Where the Price Line Falls

This is where many businesses set up their POS wrong, because the four price tests aren't worded the same way.

The back-to-school and emergency limits say "less than." A $99.99 shirt is tax-free in August, and a $100.00 shirt is taxable on the full price. The ENERGY STAR limits say "or less." A $6,000.00 air conditioner qualifies, and so does a $2,000.00 refrigerator (City of Arlington, restating the Comptroller's list). If you write one generic "under the limit" rule, at least one holiday will come out wrong at the exact boundary price.

The test applies to each item, not to the receipt. The Galveston County Daily News gives the example of two $80 shirts: both are tax-free even though the order totals $160. An item at or over the limit is taxed on its whole price, not just on the amount above the line.

For emergency and ENERGY STAR items, delivery charges count toward the limit. In the Comptroller's examples, a $299 emergency ladder with $10 delivery comes to $309 and is taxable on the full $309. A $1,995 ENERGY STAR refrigerator with $50 delivery comes to $2,045 and is also taxable (Pub. 96-1331). For the August holiday, check Pub. 98-490 before your online store adds shipping to items priced near $100. Our guide to how states tax delivery charges explains the general Texas treatment.

A few line items catch apparel and boutique owners off guard. According to the Sales Tax Institute, belts are exempt during the August holiday but belt buckles are not, and cowboy boots are exempt. Some look-alike products are excluded from the May holiday: ENERGY STAR-labeled water heaters, clothes dryers, freezers, stoves, attic fans, heat pumps, wine refrigerators, kegerators and beverage chillers stay taxable (Austin Post). For the emergency holiday, repair or replacement parts and related services don't qualify (Austin American-Statesman).

Some items are exempt all year, so they don't belong in a holiday group at all. Senate Bill 379 took effect Sept. 1, 2023, and exempts adult and children's diapers, baby wipes, feminine hygiene products, maternity clothing, breast milk pumping products, baby bottles and wound care dressings (Comptroller Tax Policy News, April 2024). Keep those SKUs in a permanent exempt category. If they end up in a holiday-only group, your POS will start taxing them again when you switch the holiday off. Boutiques that carry maternity wear should check this first.

Furniture isn't on any of the four lists. A furniture store's exposure comes mostly from the ENERGY STAR appliances, ceiling fans and bulbs it sells over Memorial Day weekend.

A Worked Example at a Houston Boutique

This example is illustrative. It assumes a combined state and local rate of 8.25%; confirm the rate for your own location. During the August holiday, a customer buys a $64 dress, $120 boots, an $18 belt and a $12 belt buckle.

Tax-free: the dress ($64) and the belt ($18), because both are qualifying items under $100.
Taxable: the boots ($120, over the limit) and the buckle ($12, not a qualifying item).
Tax due: $132 × 8.25% = $10.89.
Tax on the same cart outside the holiday: $214 × 8.25% = $17.66.

If your POS taxes the whole cart, you overcharge the customer by $6.77. If it exempts the whole cart, you under-collect $10.89 and owe it yourself. Setting tax at the item level prevents both mistakes.

Flagging Eligible SKUs in Your POS and Online Store

Set this up a week before each holiday, not on Friday morning.

Create a holiday tax group instead of deleting your tax rate. Make a "TX holiday exempt" tax category and move only the qualifying SKUs into it. Everything else keeps its normal rate, and year-round exempt items stay in their own permanent category.
Split SKUs by price where needed. Most POS systems apply tax by item or category, not by price. If the same product comes in a $95 version and a $110 version, make them separate SKUs, and keep anything at or over the limit out of the exempt group.
Check what discounts do to the price. A store discount can bring an item under the limit. Pub. 98-490 gives this example: an 8.25% discount on all clothing brings a $100 shirt to $91.75, so it qualifies and no tax is due. Read the publication's discount examples before you plan holiday promotions, and test a discounted boundary item at the register.
Schedule the switch for local time at each store. The window opens at 12:01 a.m. and closes at midnight. Most of Texas is on Central time, but El Paso and Hudspeth counties use Mountain time, so a chain with stores in both zones needs separate switch times. If your POS or e-commerce platform can't schedule a tax change, name the person who will switch it on and off, and run a test sale right after each change.
Make the same change online. Shopify, WooCommerce and BigCommerce stores manage tax settings separately from the in-store POS. Out-of-state sellers that do business in Texas also have to apply the exemption (Pub. 98-490).
Brief your cashiers. Give them a one-page list of borderline items (buckles, dryers, replacement parts) and tell them to send exceptions to a manager instead of overriding tax on the spot.

If your current system makes per-item tax categories hard to manage, our guide to choosing a retail POS system covers what to look for. MannyPay sells POS systems for retail counters from Clover, Valor, Dejavoo and PAX, along with online payment gateways that connect to the major cart platforms.

Layaways, Rain Checks and Online Orders

For sales that don't happen at the counter, the timing rules decide whether the item is exempt or taxable.

Online, phone and mail orders. For the back-to-school holiday, an order qualifies when the customer pays during the holiday, even if the item ships or arrives later (Dallas Express; Galveston County Daily News). The emergency supplies rule, 34 Tex. Admin. Code § 3.353, treats an order accepted for immediate shipment as qualifying even when a backlog or backorder delays it. Keep the payment timestamp and the order-acceptance timestamp for every holiday order. If you offer pickup, make sure the payment falls inside the window, since the pickup date doesn't count. Our article on charging correctly for buy online, pick up in store covers the payment side.

Layaways. In August, a qualifying item is tax-free if the customer puts it on layaway during the holiday, or makes the final payment during the holiday on an item already on layaway. Either way, the item's price must stay below $100 (Gladewater Mirror, reporting the Comptroller's release). The emergency rule is narrower: its layaway provision applies when the customer makes the final payment and receives the merchandise during the holiday. Mark each layaway ticket with the holiday that applies. If you're deciding whether to offer layaway at all, see BNPL vs. layaway for your store.

Rain checks. A customer who redeems a rain check during the holiday gets the exemption, no matter when you issued the rain check. A rain check issued during the holiday and redeemed after it ends doesn't qualify, and the item is taxable (Comptroller Tax Policy News, July 2022). Special orders work the same way. Pub. 98-490 gives the example of a $50 shirt special-ordered during the holiday but paid for later: tax is due. Print that rule on the rain-check slip so customers aren't surprised.

Business buyers. A business buying school supplies on a business account must give you a completed Texas Sales and Use Tax Exemption Certificate, according to the Galveston County Daily News report. The ENERGY STAR and water holidays have their own contractor rules. For water-conserving products, separated contractors can sell tax-free only to individual customers for their homes, and sales to businesses are taxable (Pub. 98-1018).

Handling Returns and Exchanges After the Holiday

Start with tax a customer shouldn't have paid. If you charged sales tax on a qualifying item during a holiday, the customer can ask you to refund that tax, and the Comptroller says so in each holiday publication. Refund only the tax amount to the original card as a partial refund, and keep the original receipt with the refund record. Whether you get processing fees back on a refund depends on your processor's terms.

When a customer returns an item bought tax-free, refund the price they paid and don't add tax you never collected. Your POS can only do this if it looks up the original sale. If it re-rings the item at today's taxed price, the refund will be wrong. Turn on receipt lookup for returns in the weeks after each holiday, or make it mandatory.

Exchanges take more care. The tax on an exchange made after the window closes can depend on what the customer swaps the item for and when. Before you write the policy your cashiers will follow, check the Comptroller's holiday publications and sales tax holiday FAQ, or ask your tax preparer. Cashiers shouldn't have to decide this at the register. A clear, posted returns policy also helps you win disputes, and our post-holiday returns guide covers refunds that don't lead to chargebacks.

Records to Keep for a Comptroller Audit

The Comptroller tells sellers to report tax-free holiday sales in Total Texas Sales (Item 1) on the sales tax return, not as taxable sales (Pub. 98-490). If your prices included tax, back the tax out before you calculate Total Texas Sales. Discounted items go in at the discounted price: in the Comptroller's example, the $91.75 shirt is reported as $91.75 in Item 1. Run a report for each holiday window that separates exempt holiday sales from your regular taxable and exempt sales. If an auditor asks why your taxable sales dropped one weekend in August, that report answers the question.

For each holiday, keep:

Item-level transaction logs with date and time stamps showing the exempt tax category was applied
Online order records with payment and order-acceptance timestamps
Layaway ledgers showing when each item went on layaway and when the final payment came in
Rain-check and special-order logs with issue and redemption dates
Exemption certificates from business buyers, plus separated contracts from contractor sales
Refunds of tax charged in error, each linked to the original sale

Keep these records for the full retention period Texas requires, and confirm that period with your tax professional. This article is general information, not tax advice. For edge cases, Rule 3.353 and the Comptroller's publications are the authority.

The next holiday is emergency preparation, expected April 24 to 26, 2027. Build and test your exempt tax category by mid-April, then reuse the setup for Memorial Day and August. Check your year-round exempt items now, because a diaper or maternity SKU sitting in the wrong group is easy to fix before the holiday and hard to unwind after it. If you're reviewing your POS or processing setup, request a free quote from MannyPay, and a specialist will respond within one business day.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.