Several states in the 2019-2020 state legislative sessions considered legislation to make college textbooks and course materials exempt from sales taxes or expand existing sales tax exemptions to additional learning resources such as required supplies and equipment. Other states have also considered repealing most of their sales tax exemptions.

States also continue to reform their sales tax laws and rules in the wake of the 2018 Supreme Court ruling on South Dakota v. Wayfair that created a roadmap for states to require sales tax collection on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.

With many students struggling to pay for their education costs, sales tax on textbooks is an unnecessary added tax burden on students’ learning. Inevitably, states and localities end up taxing limited financial aid such as Pell Grants and even their own state grant programs like California’s Cal B program, which diminish the value of these aid programs targeted to students with the greatest need. 

NACS supports state education tax incentives including sales tax exemptions for course materials that make course materials and supplies more affordable for students. Such exemptions should be vendor-neutral allowing institutional, private, and leased bookstores to compete on a fair and equal basis, while ensuring a reasonable level of accountability for such exemptions. 

NACS also supports the equitable application of sales tax collection responsibilities between retailers of like products, regardless of how they are purchased. Sound public policy requires a tax system that does not unfairly favor one type of sale over another or Internet shoppers over traditional store shoppers. 

NACS has testified in numerous states in support of textbook sales tax exemption legislation and opposing efforts to repeal these valuable tax breaks for students. NACS also played a role in advocating for more than a decade for e-fairness legislation in Congress and the Supreme Court culminating in the South Dakota v. Wayfair decision.