College Textbooks Sales Tax

Sales tax exemption for college textbooks has been a popular but unsuccessful issue for state legislators, with college textbooks tax-exemption bills having failed to pass in 16 states over the last 5 years.

Legislators typically introduce such bills at the urging of student groups eager to reduce college textbooks costs. However, support for the bills usually slips when legislators discover individual students would only save an average of about $50 per year on their college textbooks expenses while the state would lose tax revenues.

Georgia, Illinois, Michigan, Washington, and New Jersey have introduced bills intended to lower the cost of college textbooks for students. Georgia's bill would limit the retail prices on college textbooks while the other bills seek to reduce or eliminate sales taxes on college textbooks.

Georgia: House Bill 1368 would require college bookstores to sell new college textbooks at no more than 15% above the wholesale price paid by the store for the books. Independent privately owned stores would not be subject to the bill's provisions.

Illinois: House Bill 6628 would eliminate 5% of the current 6.25% sales and use taxes on college textbooks required for higher education courses. HB 6628, which was introduced on Feb. 9, has been referred to the House Rules Committee.

Michigan: House Bill 5488 would waive state sales taxes on college textbooks required for courses at higher education institutions. HB 5488, which was introduced on Feb. 5, has been referred to the House Committee on Tax Policy.

New Jersey: Required college textbooks are already exempt from sales tax in New Jersey, but Senate Bill 923 would broaden the exemption criteria to include recommended college textbooks. The bill would not apply to used textbooks.

Washington: The Washington State Legislature is considering exempting college textbooks from sales and use taxes.

Senate Bill 6475 and its identical companion bill, House Bill 2944, would apply only to college textbooks required for courses at higher education institutions, not recommended or optional textbooks or used textbooks. The bills mandate that booksellers would have to obtain documentation from the instructor or institution to show that the college textbooks purchases were required.

None of the state bills would apply to used textbooks.

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