Shoppers scrambling for discounts in a battered economy should drive sales during South Carolina's annual sales tax holiday in three weeks, experts say.
The state will suspend its 6 percent sales tax Aug. 5-7, along with all local-option taxes, on traditional back-to-school items, ranging from clothing and school supplies to computers and printers.
"The weekend should be very good for consumers," said Marianne Bickle, a University of South Carolina retail professor. "I really believe people use the sales tax weekend (now) more than ever before, because they realize (in this economy) anything off is better than nothing off."
Forecasters predict consumers nationwide will spend 3 percent more this year than last getting ready to return to the classroom, which could translate into $39 billion in total sales during the back-to-school shopping season from mid-July to mid-September.
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In South Carolina, the three-day annual sales tax holiday has become the third busiest shopping period of the year, preceded only by the weekend after Thanksgiving and the weekend before Christmas, according to the S.C. Department of Revenue.
After being buffeted on all sides with bad financial news for at least the past three years, experts say consumers seek relief wherever they can find it.
The economy has been bad for much longer than anyone might have expected, Bickle said, yet June retail sales trended up and coupon use and bargain hunting have become widespread.
That all points to higher sales during the sales tax holiday weekend, Bickle said. There also are other indicators the weekend should be successful, she said. Gas prices are up, Bickle said, accompanied by 14 percent higher food prices, while consumers' salaries have either remained flat or fallen.
The result is a squeezed buyer, Bickle said.
"Consumers are aggressively saving and using coupons, and you'll see that," she said.
The state Revenue Department lists nearly 150 categories of items that fall under the sales tax exemption for the Aug. 5-7 weekend.
Born under the Hodges administration, the 12-year-old provision was intended to assist families of modest means in providing the necessary items for their children to return to school, said Rep. Chip Limehouse, R-Charleston.
Pencils, pens, paper, shoes and clothing are what the supporters of the law had in mind, said Limehouse, who helped craft the legislation. Now it's become bloated, featuring too many items unrelated to school, he said.
"The list is too broad," Limehouse said Thursday. "We've seen everything under the sun be added to it."
That complaint also arose last year. Limehouse said the list of items eligible for the sales tax exemption can be amended simply by a lawmaker introducing a bill and getting it passed.
The list of items eligible for the exemption was not expanded this year, according to the Revenue Department. However, the Legislature did do away with a similar gun sales tax holiday this year.
Consumers save an estimated $3 million during the tax-free weekend, according to the department, and Limehouse said the timing couldn't be better.
"The idea is even more valid now than ever before," Limehouse said. "What we need to do is revisit the list of items."