Stores gear up for tax holiday
Published 8:37 am Wednesday, August 5, 2009
FRANKLIN— Wardrobe need updating? Running low on pens and paper? If so, you may want to hit the stores this weekend to save a little cash. Friday through Sunday is Virginia’s annual back-to-school sales tax holiday.
This is the fourth year that Virginia is exempting certain school supplies and clothing items from the state’s 5 percent sales tax. In order to be exempt from the sales tax this weekend, school supplies must be $20 or less each and clothing items and footwear must be $100 or less each.
Joel Davison, public relations manager for the Virginia Department of Taxation, said that the state is expecting a large turnout for the sales tax holiday this weekend. He expects cash-strapped families to pack stores throughout the state.
“The economy is definitely going to affect (turnout), especially with families on a tight budget with multiple children going back to school,” he said.
According to a survey from the National Retail Federation, back-to-school shoppers are expected to spend about $1.4 billion less than they did last year. Despite that, local retailers are gearing up for what they hope will be a busy weekend.
Lisa Outland, who manages the Belk in Franklin, said that back-to-school sales and the tax-free holiday are always big deals at the store but even more so this year because concerns about possible layoffs had people spending less.
“I think it’s bigger this year because of the way business has been,” she said. “We’re hoping for a big turnout.” Outland said that Belk will have extended hours all weekend and is “including every facet of the store” in order to help customers get the best deals possible.
“Our goal is to give them the best value for their money,” she said.
The state stands to lose at least $4 million in tax revenue over the weekend. However, Davison said that the $4 million figure is “strictly an estimate,” and that it’s impossible to pinpoint the exact amount of lost revenue for the weekend.
Virginia started holding the back-to-school tax-free holiday because neighboring states were already doing it, but both Maryland and the District of Columbia, which usually hold back-to-school tax-free holidays, aren’t this year because of concerns about lost revenue. While Virginia is also facing slumping revenues, there is no talk of canceling tax-free holidays.
“We haven’t heard anything about it stopping in Virginia,” Davison said. “The governor is even planning a public event later this week to push the holiday.”
Andy Childress, the manager at Walgreens in Franklin said that last year’s sales during the weekend were “very strong” and he expects this year to be even busier.
“I think we’re going to see a better turnout this year because people are looking to save as much as they can,” he said.
Childress said that there weren’t too many questions from consumers about the holiday last year.
“People are usually pretty knowledgeable,” he said. “Some people are surprised about what they can get (tax free).”
In addition to tax-free school supplies, Walgreens will also be offering sales to give shoppers deeper discounts, according to Childress.
Davison said that retailers offering extra discounts, or even offering to pay the sales taxes on items that don’t qualify for the holiday, are common.
The tax holiday isn’t just for children either. Clothing for adults and certain office supplies are also exempt from sales taxes, as long as they qualify under the price guidelines.
There are two other tax holidays in Virginia. There is a hurricane preparedness tax holiday in May and an Energy Star product tax holiday in October.
A full list of exempt items and a set of frequently asked questions about the holiday can be found at www.tax.virginia.gov.