Back-to-school shopping goes on without Georgia’s sales tax-free holiday

Schoolchildren grew taller, their feet got bigger and their backpacks fell apart since the final bell rang.

But back-to-school shoppers waiting for the tax-free holiday to replace the old with the new won’t find that relief at the register this year. State legislators did not approve a renewal of the popular tax break weekend, citing a $2 billion budget deficit that leaves no room for a reprieve.

Sales-tax free weekend aimed to help consumers save on apparel, footwear, school supplies and computers began in 2002. While it generates a frenetic buzz for shoppers and retailers alike, it costs the state $12 million in revenue. A similar break usually held in October for energy efficient appliances and other items results in a $500,000 loss. The weekend of tax-free purchases, proposed this year for July 29-Aug. 2, has to be created by legislation every year.

This year, there was neither the will nor the money to do so.

“What I hear Georgians say is they’d rather have their classroom teachers in the classroom teaching than have that sales holiday,” Speaker David Ralston (R-Blue Ridge) said in March as budget negotiations in the House and Senate intensified.

Georgians pinched by job losses and financial crisis can ill-afford to have the break snatched away, said Sen. Tim Golden (D-Valdosta). After his wife annually crossed into Florida to take advantage of its tax-free holiday, he helped create the sales tax holiday. Today, 16 states and Washington, D.C., including Florida and South Carolina, have variations of tax-free holidays. While Florida resumed its tax holiday after a two-year hiatus, Georgia is the only state this year to drop it.

“This year, of all years, people need it,” said Golden, while acknowledging the state’s financial dilemma. “Retailers need the boost more than ever and families need the boost more than ever.”

John Heavener, president of the Georgia Retail Association, believes the state actually nets about $20 million during the sales tax breaks from salary, corporate and other tax revenue generated. He said the back-to-school shopping season is the second most important after Christmas for many retailers, especially for discount and department stores.

Heavener sent lawmakers a study showing these figures, which he called conservative, but his efforts didn’t turn the tide.

“We were hoping as retailers that the common sense approach would work, and that looking at the facts and figures would convince them it was worth it in a year when everything was up in the air,” said Heavener.

He fears that the sales tax holiday may not come back anytime soon. The Legislature appointed a committee to look at the state’s entire tax structure this year, and he believes the sales tax breaks could get sidelined indefinitely. Currently, state sales tax is 4 percent, but add-ons for county and local governments drive the average sales tax up to 6.5 percent, he said.

The National Retail Federation says retailers report a 30 percent increase in sales during tax-free shopping. Few would bolt to stores for a 5 percent off sale, but the same amount disappearing in sales tax becomes an event.

“The psychological appeal goes far beyond the cash register,” said J. Craig Shearman, vice president of government affairs for the NRF. “As tight as the economy is today, a few cents can mean a lot.”

Karon Warren of Ellijay doesn’t revamp her pre-schoolers wardrobe for school shopping, but has always seen the sales tax holiday as a bonus.

“It’s a little disappointing it’s not happening this year,” Warren said.

Retailers are rolling out aggressive sales and promotions with the hope that consumers will hardly notice the difference. Bobby Johnson, BrandsMart’s senior vice president of sales, said the traffic usually driven to those days will be more spread out because there will be “no sense of urgency.”  Still, retailers don’t expect consumers to turn away because the tax break has gone away.

“Shoppers will not lose out,” said North Georgia Premium Outlets general manager, Heather Halpern. “They will have a great sale during a period they will be missing the no tax benefit…These savings will far exceed the tax free savings.”

AJC staff writers Aaron Gould Sheinin and Rachel T. Ramos contributed to this report.

Follow me on Twitter @atlbargains and on Facebook at AJC Atlanta Bargain Hunter

22 comments Add your comment

Lauren

July 13th, 2010
9:04 am

Good for the Georgia legislature! Sales tax holidays are poor policy. As the article points out, it is effectively a five percent off sale, but consumers fall for it. The government loses revenue, retailers often increase prices, and for the most part it doesn’t increase consumption, it just alters the shopping cycles. Consumers wait til this weekend to purchase items, they would have bought the month before.

Ronda

July 13th, 2010
9:29 am

That’s faulty thinking. It doesn’t matter if they waited this weekend or next month – they still bought the items. THAT’S THE POINT. It does increase consumption if consumers decide to purchase items (energy appliances) that were not broken at their home but needing updating which is the whole point of the tax-free – get us to spend. If its 2nd to Christmas in purchasing then they did their job.

HP

July 13th, 2010
12:36 pm

Thank you! This needed to end years ago. The state needs the money. Tell me people, do you want a measly five percent off, or do you want teachers to have a decent salary and have police and fire personnel when you need them?

And yes, stores DID increase prices during this weekend.

Deke

July 13th, 2010
12:45 pm

Would someone explain the logic of a sales tax free weekend for me? Isn’t that akin to a store holding a “Everything 6% Off Sale”?

jrp

July 13th, 2010
1:01 pm

@Deke..It is, it’s just that there are some people that really think they are getting a really great deal..Like HP said, stores mark up for these sales, so??

Watch when a major store has a going out of business “sale”..People are in there like a pack of wild animals,yet if you ever look under the “new lower” price tag, you will see that it was cheaper before that marked it down..

David S

July 13th, 2010
1:18 pm

While I am always for the elimination of taxes, this one is just a blatant vote buying scheme pandering to a constituency that already benefits from extremely low cost subsidized (sub standard of course) education.

The problem with state and federal legislatures when it comes to tax cuts is that they love the votes the cuts buy, but are unwilling to make the spending cuts to offset the lost taxes for fear of losing other votes in the process.

Social engineering through the tax code has not only destroyed the moral fabric of this country, but has turned one group upon another through tax and wealth envy. But of course to point out that this goal may have been the point of these kinds of policies all along might get one labelled a conspiracy theorist.

Buy what you need and work to eliminate sales taxes for everyone. That is an approach we should all be able to get behind.

Also keep in mind that you need a whole lot fewer supplies for a home school than you do to fulfill a government school purchase list.

Just saying.

teacher

July 13th, 2010
1:34 pm

Thank goodness that this is over for now. I could not figure out why in the midst of a huge state money shortfall, we would entertain not collecting money from the back to school sales.

Rhonda

July 13th, 2010
2:25 pm

One weekend without sales tax is not going to put the State over the top. It can help a struggling family, when they have to buy all the required items on the list from the school. Due to paycuts alot of salaries have been cut down to barley making it. When you have 4 children to purchase supplies for. The amount may not seem like alot to alot of you, but it could help put supper on the table for 1 day.
Mortgages, hugh utility bills, groceries, and finally gas. Any help a single parent can get is appreciated.

CSC

July 13th, 2010
2:46 pm

Actually, tax-free days never saved consumers much of anything because retailers didn’t offer any discounts during the sales tax holiday–they waited until after that to discount items. It has always benefited consumers wait until after the sales tax holiday, as the savings are better. Now maybe the retailers will offer those discounts earlier, and the State will benefit by collecting the sales tax.

lwa

July 13th, 2010
3:23 pm

I never shopped during the tax holiday weekend. The lines were to long to save a dollar or two. I don’t have a lot of money, but I purchase wisely during the year. In addition, the kids don’t need 5 packs of loose leaf paper in August. I get the basics now and buy as I go along. Also, during Labor Day, paper and notebooks will be on sale. Buy for this year and next if you can. You can save a lot of money. Remember the floods happened in September last year. When I purchased schools supplies for the students who were flooded out of the schools, I purchased some for my house also.

HP

July 13th, 2010
3:41 pm

@Rhonda: I see what you are saying. I do. But believe me, this wasn’t helping you long term as much as you think. Think about this: Do you still get paid when you have to call in “sick” or take a personal day from work because you have to stay home with kids because they have yet ANOTHER furlough day, as a result of the budget shortfall? A lot of people don’t.

Family of 6

July 13th, 2010
8:14 pm

Because I bought off-season, I only spent about $40 total for 3 kids. The supply lists are pretty standard and easy to anticipate. I shopped the loss leaders from office superstores in July (lots of things for free, $0.01, $0.10, etc.) and from Target/Walmart 75% off a few weeks after school started. Got $3 rolling backpacks from an Office Depot going out-of-business sale. Keep your eyes peeled, and don’t follow all the sheeple!

(Clothes & shoes not included, but we had a dress code and I looked in the thrift stores all year.)

sprouts quailty children's resale

July 13th, 2010
10:03 pm

Sprouts quality children’s resale is not only have their regular low prices, and up to 20% off as well as they are going to pay your taxes for you on Saturday July 17th. Women we are paying your sales taxes as well

sprouts quailty children's resale

July 13th, 2010
10:09 pm

The state is not having their tax free shopping but Sprouts quality children’s resale in Conyers Ga 770 761 8845 is paying the taxes for thier customers on July 17th on everything in the store. This is after all discounts apply. children back to school items, infant clothing and accessories, women we have authentic coach pursues starting at $49.00 all this is tax free July 17th

Ole Guy

July 15th, 2010
1:28 am

OK, let’s see if I’ve got this in perspective:

The HE and the SHE engage in that which HEs and SHEs have been doing since Adam and Eve…NO ONE INFORMED ME ON THIS.

HE and SHE (strike forehead with open palm) have a kid…NO ONE INVITED ME TO THE PARTY.

Now, the tax revenues, which will be all-the-more depleated because HE and SHE make purchases, taxfree, will become burdensome to me. WHY AM I EXPECTED TO SHARE IN THE BURDEN OF HE’s and SHE’s doings?

» 2010 Sales Tax Holidays

July 16th, 2010
6:02 am

[...] shopping. And you know what that means, right? Time for a sales tax holiday! Unfortunately, some states have dropped their tax-free shopping days due to budgetary problems, but others are still going [...]

BOYCOTT BP

July 16th, 2010
2:08 pm

As a retailer of family apparel, I have cut back on help because sales are dramatically off from last year. This affects disposable income for the non working employee who has less to spend. The Tax Free Weekend has in the past brought shoppers out because of the perceived savings, which is really not a significant percent, however, it is seen as an avent and people spend.

Thanks to the legislature not extending the Tax Free Weekend, we can expect lower sales revenue for our businesses, plus, our employees will have less to spend because we don’t anticipate their need to work because the business is not anticipated.

It’s LOSE LOSE FOR EVERYBODY and I doubt that the state treasury will gain either.

[...] there’s no sales-tax holiday this year in Georgia. Don’t despair. Back-to-school shopping can still be a highlight for children — and an [...]

Barbara

July 21st, 2010
2:49 pm

I have always boycotted the sales tax holidays. No one who can do math would think that the savings to the consumer are significant. The state, on the other hand, loses a considerable amount of money that our schools desperately need.

F-105 Thunderchief

July 28th, 2010
7:52 am

JC Penney is having a sale touting they’ll still save you more than you would have during a sales tax holiday … so, good for them.

[...] sale, sears, tax free, tax free holiday, tax free weekend. Leave a Comment The GA legislature voted not to have a tax-free weekend this year, but that isn’t stopping retailers for cost-cutting back to school [...]

joe joe

July 28th, 2010
8:58 am

The tax free holiday I don’t have much of an opinion on that.
But as far as the lead article & them looking at tax changes (Thats spanish for tax increases) what blooming fricking idiot would ever consider raising taxes during a recession, or in my industry, housing it is a depression.
It’s simple if you want to create more of an activity you lower the tax, if you want to retard an activity you raise the tax. You raise taxes then that will be less revenue to the govt. through sales.