Sales tax holidays an opportunity to support local businesses
The upcoming sales tax holidays on school supplies and food are a good opportunity for people to support local businesses still recovering from the COVID-19 economic downturn.
The sales tax holiday on clothes, food supplies, and computers is July 30-August 1. The sales tax holiday of food, food ingredients, and prepared food is July 30-August 5.
It might just be the last week of July, but schools are opening soon, and so are parents’ wallets. According to consulting firm KPMG, the average spent per child on back-to-school items is $268 for the 2021 school year, up 9 percent from last year. What’s most is the National Retail Federation estimates families will spend a total of $849 on school supplies.
This school year is projected to be more normal as the lion share of students will be back in a physical classroom. In response, consumers are saying they’re likely to spend more this year, specifically on products such as footwear, clothing and electronics.
To help parents save on these expenses, Tennessee is offering a sales tax holiday, giving consumers a little break on the cost of these back-to-school supplies.
Exempt from the sales tax are school and art supplies with a purchase price of $100 or less per item, such as binders, backpacks, crayons, paper, pens, pencils, and rulers and art supplies such as glazes, clay, paints, drawing pads, and artist paintbrushes. Also exempt are general apparel that cost $100 or less per item, such as shirts, pants, socks, shoes, dresses, etc.
Also, during this weekend beginning at 12:01 a.m. Friday, July 30, and ending Thursday, Aug. 5, at 11:59 p.m. food, food ingredients, and prepared food are exempt from sales tax. This includes qualified sales of prepared food by restaurants, food trucks, caterers, and grocery stores.
Tennessee’s economy is stronger than it was a year ago, but it may be months before small, independent businesses get back to where they were before the pandemic. Small businesses do a lot to help their communities, and the sales tax holidays are a good opportunity for people to support small businesses.
Small businesses account for 99.5 percent of all businesses in the state, and they employ 43.1 percent of Tennessee’s workforce, according to the U.S. Small Business Administration. A study by American Express found that 67 cents of every dollar spent at a small business stays in the community and creates an additional 50 cents in local business activity as employees and owners purchase local goods and services.
Merchants are in need of all the boosts they can get after mandatory shutdowns last year and slow reopenings. The sales tax holiday is a chance for consumers to save and local merchants to profit.