Independent Retailers Partake in Tax-Free Holiday Marketing

Tax-free holidays have been around for more than 10 years and popular for the past five, especially during the recent economic downturn, which had families pinching pennies. ”Tax” is one of those terms that makes a consumer scowl, and tax-free holidays are a marketing technique to get shoppers out to the stores. “There’s just something psychological about not wanting to pay tax,” says Rick McAllister, CEO of the Florida retail group. “Let’s face it, has got rich doing it. they don’t collect the tax. People just enjoy not paying taxes.” And while Washington, D.C. based Tax Foundation believes the marketing “gimmick” to be another thorn in the side of an economy in recovery, retailers in participating states beg to differ.

Just last year, local retailers in Texas and Connecticut saw a jump in activity as the states rolled out annual tax-free shopping events. “We’ve had lots of sales and specials and reductions to go with the tax-free holiday,” one retailer said. “I’m just happy that the state added more school supplies to the tax-free list because that helps the families who really need it.” In Connecticut, 2010 marked the state’s 10th annual Sales Tax-Free Week, saving consumers from paying a 6 percent sales tax. “Both consumers and retailers benefit from this annual end-of-summer ritual: Families get a price break and store owners get increased ‘foot traffic’ in their stores. That’s good for our economy and, in turn, good for keeping and growing jobs — our top mission right now,” Connecticut Governor Jodi Rell said in a statement.

The participating states vary a little from year to year. Arkansas is the only new adopter for 2011. Florida is observing this year. Florida residents will enjoy the following: clothing and footwear, which costs less than $75 per item, and school supplies, which cost less than $15 per item, will be exempt from state and local taxes of up to 7.5 percent from Friday, Aug. 12, to Sunday, Aug. 14. According to Bloomberg Businessweek, “State economists estimate Florida and its local governments will lose more than $30 million as a result of this year’s tax holiday. Yet, the Retail Federation’s study, conducted by the Washington Economics Group Inc. of Coral Gables, concludes Florida’s tax revenues increased by  $7 million due to last year’s tax holiday despite official estimates that it’s a money-loser.”

Below are a few of the other states holding tax holidays this summers, to learn of more click HERE:

Connecticut: Connecticut is one of just two states to observe a week-long holiday. The grace period from the state’s 6 percent sales tax lasts from Sunday, Aug. 21 to Saturday, Aug. 27. It includes clothing and footwear that cost less than $300 per item.

Maryland: Like Connecticut, Maryland’s tax holiday lasts for seven days: Sunday, Aug. 14 to Saturday, Aug. 20. The state’s 6 percent sales tax won’t apply to the purchase of clothing and footwear that costs less than $100.

Massachusetts: Signed into law just in time for back-to-school shopping, Massachusetts will observe two days of tax free shopping, on Aug. 13 and 14. Nearly as generous as Louisiana, Massachusetts will lift its 6.25 percent sales tax on almost any tangible, personal property, costing less than $2,500.