Colorado bill aims to save families money on back-to-school supplies via a sales tax holiday

A row of backpacks and coats hanging up in wooden cubbies in a classroom.
A bill under consideration by Colorado lawmakers would create a weekend-long July sales tax holiday for back-to-school supplies. (Kriston Jae Bethel for Chalkbeat)

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Colorado families shopping for school supplies wouldn’t have to pay state sales tax during a weekend-long tax holiday under a bill being considered by state lawmakers.

For one weekend in July, House Bill 1048 would exempt from Colorado’s 2.9% sales tax:

  • Items of clothing, including shoes, that cost $100 or less.
  • School supplies, such as pencils, calculators, and lunchboxes, that cost $50 or less.
  • Learning aids, such as flashcards and stacking blocks, that cost $30 or less.

The items would only be exempt if they would be used “primarily” by a child or teenager under 21 years old, the bill says. Supporters framed the bill as a money-saver for families at a time when affordability is top of mind for many Coloradans.

“I’m raising two daughters right now, and I think every $5 you can keep in your pocket is important,” said Assistant Minority Leader Rep. Ty Winter, who is cosponsoring the bill.

Two Republicans who represent rural areas — Winter of Trinidad, and state Sen. Byron Pelton of Sterling — are the main sponsors of the bill. But Democrats also support it.

“This is for all the kids that wonder if they get the wide ruled or the college ruled or how many they could afford, as well as getting the good glue sticks,” Assistant Majority Leader Rep. Jennifer Bacon, a Denver Democrat and former teacher, said at a bill hearing last month.

The bill passed out of the House Finance Committee in late February on a 10-1 vote, with just one Democrat voting no. Rep. Bob Marshall, a Democrat from Highlands Ranch, said he was generally opposed to what he called tax “carveouts and exceptions for popular groups.” The bill now advances to the House Appropriations Committee.

The first back-to-school sales tax holiday would be July 23-25, 2027, the bill says. It would decrease Colorado’s sales tax revenue by $1.4 million in the first year, according to a fiscal analysis by legislative staff. That estimate is based on the assumption that families will spend $395 per child on clothing and shoes and $135 per child on school supplies, the analysis says.

The bill would also allow — but not require — towns, cities, and counties to adopt similar sales tax holidays to increase families’ savings. For example, the city of Denver charges an additional 6.25% sales tax on top of the state’s 2.9%.

Winter said he came up with the idea after visiting a mall in New Mexico. When Winter asked why the mall was so crowded, he said he was told it was because of a sales tax holiday. Several other states, including Florida and Texas, have similar back-to-school sales tax holidays.

Winter and Pelton proposed a more wide-ranging sales tax holiday in 2024, but the bill failed to advance. The 2024 bill would have created two two-week sales tax holidays per year for school supplies, clothing, and computers. It also would have exempted all baby and toddler products, such as cribs and strollers, from state sales tax.

Melanie Asmar is the bureau chief for Chalkbeat Colorado. Contact Melanie at masmar@chalkbeat.org.

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