Retailers tout electronics in back-to-school tax holiday
TALLAHASSEE, Fla. – Retailers expect an even bigger year from savvy discount shoppers as some high-tech gear has been added to the state's upcoming three-day break from sales taxes on back-to-school items.
Certain clothes, shoes, wallets, bags, and backpacks costing $75 or less and school supplies costing $15 or less will be included in the "sales tax holiday," which lawmakers approved for Aug. 2 through Aug. 4. And for the first time, personal computers, digital readers, tablets and select accessories costing $750 or less, as long as they're not used for commercial purposes, are also covered.
The Florida Retail Federation expects additional hiring by some businesses and says electronics companies have already started lowering the prices on laptops and tablets to fit under the $750 benchmark to be sales-tax free.
"What it looks like is the retailers are preparing for the demand, and they're marking down some computers so they can slide in under the $750 limit," said John Fleming, spokesman for the statewide trade association.
The retail federation also expects businesses will start to include sales inserts in newspapers starting this Sunday.
The shopping period isn't on the hype level of Black Friday, which is considered the unofficial kick-off of the Christmas shopping period. But its popularity continues to grow, said retail federation President and CEO Rick McAllister during a conference call Thursday.
Part of the popularity with brick-and-mortar businesses is that the tax break briefly creates a level playing field with out-of-state companies that year-round skirt the collection of state sales taxes through online sales, he said.
"It's one of those times Main Street can compete with those who don't tax," McAllister said.
The state Revenue Estimating Conference has estimated the tax break will cost Florida $28.3 million in revenue this year, with local governments out $6.4 million. The statewide projection is up from a $25.9 million estimate from the 2012 back-to-school period that was also three days.
McAllister said retailers and state officials have also long supported the shopping incentive because the money lost on marked-down school supplies -- to fit within the sales break guidelines --- is made up as more people go shopping for discounts and decide to eat out.
Still, not everyone is juiced about the pending tax-savings period.
The Washington, D.C.-based Tax Foundation, a conservative think tank, in a report posted Wednesday, noted that the holidays ---- offered by 17 states primarily in the southeast --- don't promote economic growth, as most shoppers simply shift the timing of purchases. Also, it said the holidays allow politicians to distract from permanent tax relief and benefit the wealthy.
"While sales taxes are somewhat regressive, this is often exaggerated to sell the idea that sales-tax holidays are an effective way of providing relief to the poor," the Tax Foundation said in outlining the report. "To give a small amount of tax savings to low-income individuals, holidays give a large amount to others."
The foundation also claimed that some retailers may also raise prices during the holiday, reducing the eventual consumer savings.
The tax break, as has been in the case in previous years, doesn't apply in theme parks or at airports or hotel gift shops.
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