Back to School: A Guide to Sales Tax and Saving on Textbooks

The school year is sneaking up on us, which means it's time to shop for textbooks. The College Board estimates that college students spend an average of $1,200 on textbooks and course supplies each year. What most people don't know is that many states actually exempt required textbooks from sales tax, which amounts to sizeable savings that students are missing out on. The following states have some form of sales tax exemption for textbooks: Arizona, Connecticut, Hawaii, Iowa, Kentucky, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, and West Virginia.

Merchants and retailers may not be aware of the textbook tax exemption, but students have a few ways to claim their savings. It's important to note that online retailers like Amazon and Barnes and Noble have specific procedures outlined for students seeking a tax return on their textbook purchases. A few minutes of printing and filling out paperwork can return about $129 per year in Arizona, or $107 per year in New York - enough to even pay for a new textbook or multiple nights of instant noodles.

In this guide, we'll outline the different policies and methods by state, and explain how consumers can access forms and reclaim sales tax they shouldn't be paying for.

Textbook Tax Ememption Policies by State 

A little known fact is that many states have actually passed legislation to exempt textbooks from sales tax due to the high prices of textbooks. Costs have been rising extraordinarily, which means that being informed about sales tax exemptions is so important for college students today. To put it in perspective, textbook prices have increased 812% over the past three decades. Comparatively, tuition and fees have increased 559%, medical services have increased 545%, and new home prices have increased 325% in the same period. Certain states that do not currently have tax exemptions on textbooks have proposed bills to lower the price of textbooks, but none have been passed as of this point in time.

Due to the high price of textbooks, the following states have approved sales tax exemptions (policies vary, see in table below).

State Tax Exemption Policy
Arizona Exempt when required for a course at state university or community college 
Connecticut Exempt for full-time and part-time students enrolled at institutions of higher education
Hawaii Exempt for course at nonprofit institution  
Iowa Exempt for course at nonprofit institution 
Kentucky Exempt for required course at nonprofit educational institution  
Massachusetts Exempt when required for course 
Minnesota Exempt when required for course 
Mississippi Exempt when sold at a store run by the institution 
Missouri Exempt 
Nevada Exempt when sold at store run by institution if state college 
New Jersey Exempt when required for course
New Mexico Exempt when sold at store run by institution
New York Exempt
North Dakota Exempt
Oregon Exempt 
Pennsylvania Exempt 
Rhode Island Exempt when sold new by institutions and used sold by anyone
South Carolina Exempt 
Tennessee Exempt 
Utah Exempt when required and sold at stores run by nonprofit institutions and certain off-campus stores 
Virginia  Exempt
West Virginia Exempt when required for a course 

Tax Exemption for Textbook Orders Online

If you're ordering your textbooks online and you're in a state that has textbook sales tax exemptions, it's important to make sure that you aren't taxed. To combat this, Barnes and Noble and Amazon both have comprehensive explanations on filling out tax returns if you have proof of your sales tax exemption status. A lot of college students choose to enroll in Amazon's Prime Student program because it offers great deals and free two-day shipping at a reduced price.

When purchasing textbooks online, you will need the following documents: a tax exemption certificate number, a copy of your student identifcation, and a copy of your class syllabus. Amazon only accepts tax exemption certificates for Arizona, California, Connecticut, Florida, Georgia, Indiana, Kansas, Kentucky, Massachusetts, Nevada, North Carolina, North Dakota, New Jersey, New York, Pennsylvania, Tennessee, Texas, Virginia, Washington, Wisconsin, and West Virginia.

After placing your order on Amazon and receiving shipment confirmation, you have to fax or e-mail your student ID and class syllabus or applicable tax exemption documentation. Find out more information here

When ordering textbooks online from Barnes and Noble, you will have to enter your tax exemption certificate number on the Shipping page during checkout and then fax your certificate to 201-559-3883 within 72 hours of your purchase. When faxing the tax exemption certificate, you must also fax your student identification and your class syllabus in order to receive a sales tax credit. Barnes and Noble will only exempt sales tax from textbooks purchased in Connecticut, Massachusetts, Minnesota, New Jersey, New York, North Dakota, South Carolina, Tennessee, Virginia, and West Virginia. 

How to Exempt Textbooks from Taxes in Each State

Getting the sales tax exempted on your textbooks can be a really easy process: in most states you will have to fill out a tax exemption form and bring it with you to the store when you go shopping, and in other states, you'll only have to show your school identification card and your required book list for your courses. Worst case scenario, if you forget to fill out a tax exemption form, you can later file for a tax return and get that money back. It could be daunting to try to figure out government forms, but it's not as complicated as it seems, and can be worthwhile.

Check out the tax policies in your state so you can shop accordingly. If your state has not specified how you should go about getting a tax exemption on your textbooks, assume that you will have to present your student identification card and your required course listing. 

Arizona

When purchasing textbooks in Arizona, taxes are exempt when the textbook is required for a course at a state university or community college. If you attend Arizona State University, Northern Arizona University, University of Arizona, or any of the ten community colleges you are eligible to purchase textbooks without taxes. It is likely that you will have to present your course list and student ID in order to receive the tax exemption.

If you already paid sales tax on your textbooks and are willing to fill out some extra paper work, you can file a tax return to recover the money you've already spent.

Connecticut

In Connecticut taxes are exempt on textbooks when they are purchased by full-time or part-time students enrolled at institutions of higher education. This means that whether you go to a community college, a public university, or a private university, you're eligible to purchase textbooks without taxes. Any new or used books of any kind and related workbooks required or recommended by the institution or instructor for a course is exempt from taxes.

To purchase a textbook without taxes, a student must present a list of required or recommended textbooks (if the institution or course instructor has not already supplied the retailer with a list of required or recommended textbooks) and a valid student identification card. If you don't have your official course/textbook list at the time of your purchase, you can still buy your textbooks with taxes exempt if you can provide further proof of enrollment in a course at an institution of higher education, a valid student identification card, and a written statement that you are purchasing a required or recommended textbook. 

If you are purchasing a textbook online, you will have to provide the online retailer with your name and address, the name and address of the institution, the name of the course in which you are enrolled, and the identification number on your student identification card. For further information can go here.

In the scenario that you purchased your textbooks without getting a tax exemption, you can file for a tax return here.

Hawaii

In Hawaii the tax on textbooks is exempt if it's for a course you're taking at a nonprofit institution. It's not clear how to get the tax exemption, but you probably will have to present your student identification card and your required course textbook list. If you aren't able to get a tax exemption when you purchase your textbooks, you can file for a tax return.

Iowa

As in Hawaii, the tax on textbooks is exempt if it is for a course you're taking at a nonprofit institution in Iowa. You'll have to file a tax return in order to get the money you spent on the sales tax on the textbooks back. After you purchase your textbooks, fill out this tax exemption form, attach it to your receipt, and mail it to the Iowa Department of Revenue and Finance. The University of Iowa has a step-by-step guide to getting a refund on your textbook purchases. 

Kentucky

Sales tax on textbooks is exempt if you are purchasing them for a required course at a nonprofit educational institution. There isn't a form available for tax exemption, but if you're willing to file for a tax return, you can find that form here

Massachusetts

Home of Boston, the ultimate college town, Massachusetts has exempted sales tax on textbooks that are required for a course. It's super easy to file for a tax exemption in MA. Just fill out this form here for each textbook you are purchasing and present it in the store or fax it to your online merchant. 

If you already purchased your textbooks and you're looking to get that tax money back, fill out this form here

Minnesota

Textbooks are tax exempt in Minnesota when they are required for a course. It's an easy, comprehensive process to get your taxes on textbooks exempt. Fill out this form, and give it to the salesperson who is helping you when you are purchasing your textbooks. Make sure you've filled out the form completely because if you don't, the merchant has the right to charge you sales tax. 

Say you forgot to fill out the form or didn't fill it out correctly but still need to purchase your textbooks, no worries! If you have the time, fill out this tax return form to get some of your money back.

Mississippi

In Mississippi, the sales tax on textbooks is exempt when the books are sold at an institution-run store. This means that at most university bookstores, run by the institution, you won't have to pay the sales tax on your textbooks. We're assuming that since the bookstores are run by the institution, they automatically don't charge sales tax on textbooks bought by students. Make sure you have your student identification card on you when you purchase your books. 

If you have any problems and are not able to get the sales tax exempt on your textbooks, you can fill out this tax return form to get a refund for your taxes. 

Missouri

All textbooks are tax exempt in Missouri, so go crazy and get any textbook you'd like! Of course we're joking (are we?). Any student with proof that they are a student at a public or private university, college, or other postsecondary institution are elgibile to receive tax exemptions on textbooks. When you're being rung up at the register in a Missouri bookstore, they should not charge you for tax. However, they can ask you for your course syllabus, so keep that on hand just in case. For more information, check here.

If you've already purchased your textbooks, don't worry! This is the form you'll have to fill out for a tax refund. 

New Jersey

If you're a student in New Jersey, you'll be able to purchase textbooks with tax exemptions if they are required for a course. New Jersey's tax exemption form for textbooks is by far the most comprehensive. There are spaces for several textbooks, so you'll only have to fill out the form once! Make sure you've filled out the form, and give it to the cashier who is helping you. 

New York

If you're a student in New York and the store does not have a list of textbooks provided by your instructor then you will need to furnish the following form to the retailer. The form is available here from the New York Department of Taxation finance here. You'll also need your student ID if it's provided by your school.

For anyone that already paid sales tax on a purchase, if you're willing to do some extra work and file a use tax return to recover the extra tax you have paid, the refund form can be found here.

Pennsylvania

Textbooks in Pennsylvania are entirely tax exempt, but only if they are sold by the university or college itself or at a vendor designated by them to sell textbooks on their behalf to students and teachers. To read more about the logistics, check out the codehere. All you'll need is your student identification card to prove that you are a student at a university. The vendor should already have tax exemption forms present for you to sign. 

Because of how easy it is to get the tax exempted on textbooks, you probably won't have any problems with getting the taxes exempted. If you do though, here is the tax return you can fill out to get a refund.

South Carolina

In South Carolina, textbooks are tax-exempt for any purchaser. There is no form to fill out for the tax exemption, so assume that you will have to show your student ID card and your course syllabus. If for some reason you're charged wth taxes anyway, you can fill out a tax return here.

Tennessee

In Tennessee all textbooks are exempt from sales tax. Legislation does not specify how you would go about getting the taxes exempt. If you cannot find a way to get a tax exemption for your textbooks, you can fill out a tax return form

Virginia

In Virginia all textbooks are exempt from sales tax. As in Tennessee, it's not specified how you would receive a tax exemption. It could be applied automatically in stores. If you have any issues and for some reason can not get the sales tax on your textbooks exempt, you can fill out this tax return form to get a refund. 

West Virginia

In West Virginia the tax on textbooks is exempt if the book is required for a course. We haven't been able to find a tax exemption form, but you should assume that you'll need your student identification card and your course syllabus in order to get the taxes exempt. If you can't get the taxes exempt on your textbooks when you buy them, you can fill out a tax return form to get a refund. 

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[By taking a couple minutes and printing out the tax exemption form required for your state, you could be saving a lot of money. According to the National Association of College Stores, the average new textbook cost $68 in 2012. If you bought eight new textbooks during the school year, you would have spent approximately $583 with average sales tax. If you lived in a state where the sales and use tax on textbooks was exempt, you'd save around $30. Over the course of four years, you would save $120. Yeah, it doesn't sound like it's that much, but if you're buying expensive and new textbooks, it will add up to a whole lot more than that.]

Ting is a ValuePenguin Co-Founder. She previously evaluated corporate mergers and acquisitions as a Financial Analyst at Citigroup.