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What Others Say Remember Alabama's first sales-tax holiday last year? Well, it's coming again. This year the designated weekend is Aug. 3-5, and the same rules as in 2006 will apply. The holiday is granted by the state, but local taxing authorities can opt out, if they wish. So far, few have. The sales-tax exemption covers only certain items - clothing and footwear (accessories not included) selling for $100 or less; customary school supplies up to $50; computers and related equipment items costing $750 or less. Books costing up to $30 are also exempt. Textbooks are tax-free if they cost $50 or less. For more information on what will be taxed and what won't, visit www.alabamaretail.org or www.revenue.alabama.gov/sal estax. Bear in mind that the free pass is limited. Buy a jacket costing $99 and you pay no sales tax. Buy one costing $101, and you pay the entire sales tax normally due the state and local taxing authorities. Such a holiday might stimulate even more sales, for instance, if the state taxed clothing items only to the extent that those items cost more than $100. The same principle could apply to computers and school supplies. But the rules that were in effect last year are unchanged for this year. In 2006, not only was the sales-tax holiday popular with shoppers, but government officials could find no evidence that it had an adverse effect on tax collections. Indeed, the interest generated by the exemption on some items may have spurred shoppers to buy other things even though they were taxed at the full rate. Statewide, more than 60 percent of state retailers reported increased sales during last year's holiday. Although some 210 taxing jurisdictions took part, others did not. But they may do so this year, judging from the success of 2006. As tax reform goes, this is still weak tea. The state's tax holiday certainly helps families at a time when they're spending money to send kids back to school. One tax change that would help families more would be to end the sales tax on groceries. But because of the potential loss of revenue, the proposal to do that has far from enough backers to get it through the Legislature. Nothing in life is free, but on Aug. 3-5 some things will cost a little less. When government gives you even a small break on taxes, you ought to take advantage of it.
The Huntsville Times
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