Sales tax holiday means savings for school supplies - and a lot more

rburris@thestate.comJuly 31, 2013 

A sign Monday promotes the upcoming sales tax-free shopping weekend for school supplies at Tanger Outlet Center 1. South Carolina will hold its 14th annual sales tax holiday for back-to-school shopping this weekend. The sales tax holiday starts on Friday morning and runs through Sunday night.

JAY KARR — Staff photo Buy Photo

COLUMBIA, SC -- After robust back-to-school spending last year, shoppers are expected to cut back this year.

And they will be able to stretch their dollars a little further this weekend during South Carolina's tax-free shopping period. The tax holiday - for items such as electronics, clothing and pens and paper - starts first thing Friday morning and runs through Sunday.

Shoppers statewide can save state and local taxes. Many stores also offer additional sales to coincide with the tax holiday, which is the third-busiest shopping time of the year in South Carolina.

Families with school-age children are expected to spend an average of $634.78 on apparel, shoes, electronics and school supplies, down 8 percent from last year's $688.62, according to a survey from the National Retail Federation. Total spending on back-to-school shopping is expected to reach $26.7 billion in the United States.

South Carolina consumers are expected to save an estimated $3 million this year, the state's 14th tax-free weekend, according to the S.C. Department of Revenue.

"The good news is that consumers are spending, but they are doing so with cost and practicality in mind," Matthew Shay, National Retail Federation president and CEO, said in a news release. "Having splurged on their growing children's needs last year, parents will ask their kids to reuse what they can for the upcoming school season. As they continue to grapple with the impact of increased payroll taxes, Americans will look to cut corners where they can, but will buy what their kids need."

That could mean shopping sales in addition to the tax holiday savings.

Back-to-school sales promotions began earlier this year than any in recent memory, retail experts have said, a reflection of an expected tough year for sales.

Wal-Mart, Target, Sears and other major retailers have bumped up their websites in preparation for this year's sales, even as the economy continues to struggle along in its recovery.

Seventeen states will endorse tax-free sales on selected merchandise at some time this year, according to the nonpartisan Tax Foundation in Washington.

The sales tax holiday is not without its critics, however.

"Temporary rollbacks of sales taxes, despite being sold as a boon for consumers and businesses, actually impose significant costs on both groups without yielding significant benefits," according to a new report by the Tax Foundation, which called sales tax holidays costly and poor substitutes for state tax reform.

"Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief," said Joseph Henchman, Tax Foundation vice president for legal and state projects. "If a state has to offer a 'holiday' from its tax system, it's a sign that there's a problem with the system itself."

Consumers put off purchases until sales tax holidays roll around, the Tax Foundation contends, rather than go out and make additional purchases simply because of the tax exemption.

"If politicians want to save money for consumers, then they should cut the sales tax rate year-round," Henchman said.-

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