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Sales tax holiday hopes to boost back to school spending Electronics and shoes are expected to be big sellers as families nationwide begin to stock up for the 2007-2008 school year, which bodes well for Alabama's second sales tax holiday as some items in both categories are covered in the state's three-day sales tax holiday. The Clarke County Commission as well as the city councils of Grove Hill, Jackson and Thomasville voted to participate in this weekend's program. The Towns of Coffeeville and Fulton will not participate. Families with school-aged children are expected to spend almost 7 percent more on backto school shopping this year, according to a national survey of consumer intentions. That number could be even higher in Alabama, as the state observes its second sales tax holiday with more local governments participating than last year. Alabama's sales tax holiday begins at 12:01 a.m. Friday, Aug. 3, and ends at midnight, Sunday, Aug. 5. The state's four-percent sales tax as well as sales taxes levied by any of the 225 cities and counties that have agreed to participate are waived for those three days on: • clothing priced at $100 or less; • school supplies priced at $50 or less; • books valued at $30 or less; and • computers and computer equipment with a selling price of $750 or less. As of July 18, 10 more local governments, including the cities of Mountain Brook and Jasper, had notified the Alabama Department of Revenue that they would be participating in the sales tax holiday than participated in the holiday's first observance. When local governments agree to also waive their sales taxes for the covered items, the savings for the consumer can grow to as much as 10 percent. According to the National Retail Federation's (NRF) 2007 Back-to-School Consumer Intentions and Actions Survey, the average family with school-aged children in the South is expected to spend $557.26 on back-toschool items. In Montgomery County, consumers spending that amount would save $55.73 as a result of the state's sales tax holiday. But Alabama's sales tax holiday should attract more than back-to-school shoppers. Those interested in filling out their wardrobes and stocking their libraries and home offices also can benefit from buying during the tax-free weekend. While the holiday is aimed at the back-toschool shopper, it is open to everyone. (School supplies are tax free to the noncommercial user.) However, not everything is tax free on the holiday weekend. A detailed listing of what is and isn't taxed can be found on the Alabama Department of Revenue's Web site, but perhaps the easiest way for consumers and retailers to find that information is to go to the Alabama Retail Association's Web site (www.alabamaretail. org) and click on the sale tag. That link takes you to the sales tax holiday information on the Revenue Department's site as well as other information provided by the Alabama Retail Association. Such electronics as computers valued at $750 or less, computer software commonly used by students, laptops, flash drives, blank compact discs and printers are tax free during the sales tax holiday. According to the NRF Survey, back-to-school shoppers are expected to spend 13 percent more on electronics than last year ($129.24 vs. $114.38). Footwear also will see a higher-thanaverage sales increase, with sales expected to rise 10.3 percent over last year ($108.42 vs. $98.34). Shoes, with the exception of cleated or spiked athletic shoes, valued at $100 or less are tax free during Alabama's sales tax holiday. Savvy consumers should spend some time learning which items are tax free before heading to the stores on the weekend of Aug. 3. The Alabama Retail Association and the Alabama Revenue Department in conjunction with the Chamber of Commerce Association of Alabama conducted 10 seminars throughout the state to educate retailers on what to expect during the sales tax holiday. Any retailer who did not make it to those seminars should study the material on the Revenue Department Web site in advance of the holiday. Of particular note is the Quick Reference Sheet, which lists what is taxed and what is not during the holiday weekend. It is a handy reference to put next to the cash register and to provide to clerks. Currently, 14 states, including Alabama, and the District of Columbia have sales tax holidays. Louisiana and Oklahoma are among the new states offering a sales tax holiday this year. "The sales tax holiday boosts retail sales and spurs purchases in other segments beyond the tax-free items," said Alabama Retail Association President Rick Brown. "Our association lobbied the Alabama Legislature for several years to get the legislation that made this holiday possible. We are more than pleased with the results and can't wait to see how sales go this year."
"The sales tax holiday is good for Alabama parents, good for Alabama teachers, good for Alabama retailers and good for Alabama's economy," Brown said.
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