Newspaper article The Christian Science Monitor

Attention Shoppers: No Tax Today ; A Growing Number of States Are Suspending Taxes for Back-to-School Gear, Giving a Boost to Low-Income Families

Newspaper article The Christian Science Monitor

Attention Shoppers: No Tax Today ; A Growing Number of States Are Suspending Taxes for Back-to-School Gear, Giving a Boost to Low-Income Families

Article excerpt

When Sarah Quick returns to her music studies at Bethune-Cookman College in Daytona Beach later this month, she will fill her dorm room with a new set of clothes and educational supplies bought during the traditional back-to-school shopping trip with her mom, Bess.

Sarah, from Coral Springs, Fla., admits that she hates shopping and would have rather stayed at home to practice the piano. But having saved some $100, thanks to the state's sales-tax holiday, her mother was far more enthusiastic. "It's a wonderful thing," she says. "We always wait for the holiday to buy the things we need every year."

Florida is one of 11 states, plus the District of Columbia, to offer residents a temporary sales-tax holiday on certain goods this summer. Two more states - Maryland and Tennessee - have passed legislation to join the jamboree next year.

Politicians figure that what they lose in tax revenue they make up in goodwill: Low-income families can save, and retailers enthuse because it drives bargain-hungry customers into their stores.

"We've got at least 15 stores selling children's apparel, and they take advantage of the timing to have sales of their own going on at the same time," says Larry Beermann, general manager of the 160-store Mall at Wellington Green in south Florida. "The mall is very busy right now."

Most of the participating states host their tax-free events during August to coincide with back-to-school shopping. Georgia and Florida offered their savings in July.

Beyond school supplies

It is not only parents of school-age children who benefit. In Florida, for example, the state's 6 percent sales tax was lifted on all books, clothing, and footwear priced $50 or less. And the tax exemption for school supplies under $10 also includes items for home and office such as pens, paper, notebooks, and computer disks.

Massachusetts, which claims to rely on sales-tax revenue less than any other state, is waiving its 5 percent levy on all personal retail items under $2,500 on Aug. 13 and 14. And Connecticut's 6 percent exemption from Aug. 21 to 27 covers all clothing under $300 - enough for even the most expensive of school uniforms.

The Federation of Tax Administrators in Washington, D.C., has monitored the growing national popularity of sales-tax holidays since New York became the first to give its citizens a financial break in 1997. State legislatures, the FTA says, seem immune to the skepticism of those who argue that sacrificing millions of dollars in tax revenue each year is not sound economic policy.

"States tend to follow one another," says Ronald Alt, the FTA's senior research associate. "Policymakers look at it as a good opportunity to give people a break buying their school goods, and there's definitely some incentive in that it gets people to spend."

A bigger factor is probably the state of the economy as a whole. …

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