Students in These States Never Have to Pay Sales Tax on Textbooks

textbooks exempt sales tax

We all know that college is expensive. When all is said and done, the average college student in the 2016-17 academic year paid about $25,000 to attend a public four-year in-state college. That means that over the course of a four-year degree, the average college student pays around $100,000 just to earn a degree. And the reality of the matter is that, for many college students, that translates into $100,000 in student loans. Talk about gross.

The good news is, there are plenty of ways for you to lower your college expenses so that you have fewer student loans to pay back after you graduate. One of the most obvious ways is to save money on your college textbooks any way you can.

In the 2016-17 academic year, college textbooks cost an average of $1,230 to $1,390 per student, according to College Board. Multiplied by four years, and that means that college students entering school this year will pay between $4,920 and $5,560, on average, just for textbooks. That’s 5% of your total college bill, spent on books!

Okay, now that I have your attention, there’s some good news. You already know that you can save money on textbooks by renting them, buying them used, borrowing them from friends, etc. But did you know that you can save money on textbooks by taking advantage of loopholes in your state’s tax code?

Forty-five states currently charge sales tax on purchases, and 38 of those states allow for local taxes on top of the state taxes. That means that the chances are pretty darn good that you live in a state that is charging you sales tax whenever you make a purchase. If you’re lucky, though, you live in one of the 21 states below (plus Washington D.C.), which exempt college textbooks from sales tax.

List of States that Exempt College Textbooks from Sales Tax

Without further ado, here are all of the states that exempt college textbooks from their sales tax. The map below shows in dark green the 21 states (plus Washington D.C.) where college textbooks are exempt from sales tax, and in light green the 5 states that do not have sales tax on any purchases. Iowa (the mustard-y color in the map) exempts college textbooks from sales tax in only very specific circumstances, so I’m not counting it fully in my tally.

map of states where textbooks are tax free

 

In the list below, I’ve included the regular sales tax along with each state so that you can see how much you are saving off of your purchases by buying your textbooks in each state. The list also includes any “caveats” or limitations to the sales tax exemption on college textbooks (for example, if they need to be purchased on a college campus, etc.).

Arizona
Sales Tax Rate: 5.6%, though Maricopa County adds .7% sales tax, and individual cities may impose local taxes if they wish.
Caveats: Textbooks are only exempt from sales tax in Arizona when they are required by a state university of community college.

Connecticut
Sales Tax Rate: 6.35%
Caveats: College textbooks are exempt from sales tax in Connecticut when they are sold to college students or those enrolled in private occupational schools (tech schools).

Hawaii
Sales Tax Rate: Hawaii charges a minimum 4% general excise tax, but in Oahu the total fee is 4.5% and individual  businesses may charge up to a total of 4.712% to recoup their expenses. 
Caveats: 
College textbooks are exempt from sales tax in Hawaii only when they are required for a course at a non-profit college or university.

Iowa
Sales Tax Rate:  6%, though cities and counties may add up to 1% for a total of 7%. 
Caveats: 
College textbooks are exempt from sales tax in Iowa only in a very limited instance. For textbooks to be sales tax exempt in Iowa, they must be sold to a student by a non-profit educational institution, which then must use all of the funds for educational purposes.

Kentucky
Sales Tax Rate: 6%
Caveats: None.

Massachusetts
Sales Tax Rate: 6.25%
Caveats: None.

Minnesota
Sales Tax Rate: 6.875%, though counties and cities may add additional taxes from .25% to 1%
Caveats: None.

Mississippi
Sales Tax Rate: 7%
Caveats: None.

Missouri
Sales Tax Rate: 4.225%
Caveats: College textbooks are exempt from state sales tax in Missouri when sold by bookstores at colleges or universities. Textbooks are typically not exempt from local sales taxes in Missouri.

Nevada
Sales Tax Rate: 6.85%, though counties may add additional taxes bringing the total sales tax as high as 8.265%
Caveats: Textbooks  are exempt from sales tax and local school support taxes in Nevada if they are sold within the University of Nevada school system. Textbooks sold within Nevada’s Community College System are only exempt from local school support taxes.

New Jersey
Sales Tax Rate: 6.875%
Caveats: None.

New Mexico
Sales Tax Rate: 5.125%, though local taxes may raise the tax rate as high as 9.25%
Caveats: College textbooks are exempt from sales tax in New Mexico only if they are sold to students by a bookstore that is located on the campus of the college or university.

New York
Sales Tax Rate: 4%, though local taxes may bring the rate as high as 8.875% in New York City.
Caveats: None.

North Dakota
Sales Tax Rate: 5%, though cities and counties may charge their own rates
Caveats: None.

Pennsylvania
Sales Tax Rate: 6%, though purchases made in Allegheny County have an additional 1% added, and purchases made in Philadelphia are charged and additional 2%.
Caveats: College textbooks in Pennsylvania are exempt from sales tax only if they are sold to college students by bookstores that have been designated by the college or university to sell books on their behalf.

Rhode Island
Sales Tax Rate: 7%
Caveats: College textbooks are exempt from sales tax in Rhode Island if they are sold to students by colleges or universities. Additionally, all used textbooks are exempt from sales tax in Rhode Island.

South Carolina
Sales Tax Rate: 6%, with county taxes that may raise the rate to a maximum of 7%
Caveats: None.

Tennessee
Sales Tax Rate: 7%, but local taxes may raise the rate to 9.75%
Caveats: None.

Utah
Sales Tax Rate: 4.7%, though cities may add up to another 2% on top of this.
Caveats: College textbooks are exempt from sales tax in Utah if they are required for a course and if they are sold to students by non-profit institutions.

Vermont
Sales Tax Rate: 6%
Caveats: College textbooks are exempt from sales tax in Vermont if they are sold to students by a bookstore on a college or university campus.

Virginia
Sales Tax Rate: 5.3% (4.3% state tax and 1% local county tax)
Caveats: College textbooks are exempt from sales tax in Virginia if they are sold to students by the college or university, or by any other dealer if the textbook is certified as “required.”

Washington D.C.
Sales Tax Rate: 5.75%
Caveats: None.

West Virginia
Sales Tax Rate: 6%, though local taxes may drive that up to a total of 7%
Caveats: None.

List of States Without Sales Tax to Begin With

In addition to the states above that have a sales tax, but exempt college textbooks, there are five states that just flat out don’t charge sales tax at all. These states are Alaska, Delaware, Montana, New Hampshire, and Oregon. That means that there are technically 26 states, plus the District of Columbia, where students do not have to pay sales taxes on their textbooks. And if you decide to count Iowa, then that count goes up to 27 states.

What can you do if you don’t live in one of these states?

Well, you have a few options. You can either a.) buy your textbooks in-state, paying the sales tax on your purchase and just be content in knowing that your purchase will help fund essential services to your community, b.) you can drive to a nearby state that exempts college textbooks from sales tax, or you can c.) check to see if your state offers a tax-free holiday during which time textbooks can be bought without sales tax added on top.

Considering the fact that sales taxes can reach upwards of 10% in some states once local taxes are accounted for, I recommend you think long and hard about what you want to do. Remember, every dollar counts in the fight against student loans.

About Tim Stobierski

Tim Stobierski is the founding editor of Student Debt Warriors. A freelance writer and editor with a passion for teaching people about all things personal finance, his goal is to help parents and students tackle their student loan problems so that they can live happier, healthier lives. Tim’s writing has appeared in a number of publications, including The Huffington Post, The Hartford Courant, Grow Magazine, and others. His first book of poetry, “Chronicles of a Bee Whisperer,” was published in 2012 by River Otter Press.

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