Shop locally, save big during sales tax holiday
The back-to-school signs are out, a sure sign that local schools will be back in session soon. Another sign is this weekend’s sales tax holiday, which began Friday and will continue through Sunday.
The three-day period is a great time to shop tax-free and save money on school supplies, clothing, footwear and items that youngsters will need as they prepare to return to the classroom. The sales tax holiday also provides a welcomed boom to retailers and the state’s economy as a whole.
During the three-day event, most school and art supplies that cost less than $100 per item or computers that cost $1,500 or less as well as clothing items and shoes priced at $100 or less will be exempt from state and local sales taxes, an opportunity for residents to get a discount of nearly 10 percent on such items.
As a result, it is a great time to buy what you need while saving some money. There is no requirement that the purchases be made for school purposes. There also is no limit on the number of products an individual can buy tax free.
This weekend’s sales tax holiday should bring smiles to consumers and merchants.
In years past, store owners have said that tax collections actually increase during a sales tax holiday because it draws more people to stores, where they look around and buy other stuff that’s taxed as usual. Shoppers save money on their purchases. Stores sell more merchandise. The state collects more tax revenue.
The top combined state and local sales tax rate is 9.25 percent in Tennessee, one of the highest in the nation.
The sales tax holiday, now in its ninth year, is expected to save shoppers $8 million to $10 million this year.
According to the National Retail Federation, families will spend slightly more on back-to-school items this summer than they did in 2013. The average family with children in grades K-12 is projected to spend $669.28 on apparel, shoes, supplies and electronics – up 5 percent from the $634.78 they laid out last year. At $74.9 billion, K-12 and college back-to-school spending makes this time of year second only to the winter holidays in terms of retail sales.
NRF this year broke out spending by grade, and according to the survey, families with high school students will spend the most. The survey found the average family shopping for high school students will spend $682.99, while spending on middle school/junior high comes in a close second at $682.13. Parents with elementary school-age children will spend an average of $580.94.
Although Tennessee’s unemployment rate for June was 6.6 percent, Carter County’s rate for jobless workers was 7.4 percent. This means that many local families are struggling to make ends meet. The sales tax holiday should help, though the aid will be temporary. A better solution could come through tax reform that’s meaningful and permanent, but that’s unlikely to occur anytime soon in Tennessee.
Consumer spending – the demand side of supply-and-demand – is the lifeblood of retail businesses and the sales tax holiday could be an infusion of strength in both the state and local economy. Tennessee derives more than 57 percent of its state revenues from its sales tax.
Whether you have children in school or want to individually take advantage of the holiday, we hope you will consider shopping locally. Retailers have traditionally used this weekend to offer special deals to garner your business.
We hope you get off to a strong school year and find great deals this weekend.
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