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Sales tax holiday is coming
Published July 7, 2009
The annual sales tax holiday is slated to begin Aug. 1-3, giving a much-needed boost to the areas’s economy and a break to families’ already-stretched household budgets.
Cities and counties across the state are gearing up for the holiday in which the state’s sales tax is not collected on clothing and school supplies. Local sales taxes may still be applied, depending on the city’s ordinances.
Items included in the holiday are clothing priced at $100 or less per article, including boots, coats, dresses, pants, shoes and underwear; computers, software and computer supplies with prices less than $750, such as compact disks, printers, printer supplies, laptops and towers; school and art supplies and instructional material valued at $50 or less, such as highlighters, calculators, book bags, crayons, paper, pens and pencils, reference maps and globes, sketch pads, watercolors and brushes; and books with a sales price of $30 or less.
A list is available at ador.state.al.us/salestax/salestaxhol.htm or by calling the Alabama Department of Revenue at 866-576-6531.
More than 20 states across the nation hold similar tax holidays suspending tax collection on the purchase of school supplies, clothing, hurricane preparedness goods and Energy Star appliances. Most holidays last between two to 17 days.
Locally, Albertville, Boaz and Guntersville take part in the annual event.
By contrast, Mountainboro, Geraldine and Marshall County have opted out of the holiday. Marshall County officials say by not taking part, only a few stores located outside city limits of Boaz, Albertville and Guntersville are affected.
Albertville City Accounting Director John Howard said Albertville has seen a definite increase in tax revenue. In 2004, for example, sales tax revenue for August was $585,600. In 2008, the city received $794,801 for August sales.
Howard speculated many shoppers take advantage of the sales tax holiday and purchase larger quantities of clothing, school supplies and other items that they may have purchased gradually over time in the past.
Jill Bright, Boaz city clerk and treasurer, said residents and shoppers usually take advantage of the weekend, flooding the city and its stores during the three-day event. She said the city traditionally sees a dip in sales tax revenue because sales tax is not collected on many items that weekend, but shoppers’ additional purchases usually offsets any declines.
“Lots of shoppers do buy other stuff that is still taxed, like food and other things,” Bright said.
She did not have specific sales tax figures available for the city Monday afternoon.
Boaz Mayor Tim Walker said he knows the sales tax holiday is important for many people, including store owners, parents as well as the city.
“Parents are forced to bear a burden of back to school. Not only do they have to come up with the pencils and notebooks and all the things their child needs to go to school, they also need to get clothing and things like that. We hope that they are able to come to our city and get some really good deals,” Walker said.
“Parents have to buy those kinds of thing anyway. At the same time, we hope they stay in our town and maybe eat a meal or buy other things they may need for their home.”
The Alabama Retail Association said sales tax collections in August 2008 totaled $180,257,155. In 2007, sales tax revenue was $168,024,986.
“For the past three years during August, the month of Alabama’s sales tax holiday, sales tax collections have increased over the those three years by 10.4 percent in 2006, 4.6 percent in 2007, and 7.28 percent in 2008. That amounts to a 24 percent increase in August 2008 over the same month in 2005,” said Bob Richeaux, chairman of UAB’s Department of Marketing and a member of the ARA board of directors.
The local chambers of commerce have a large role in promoting the annual sales tax holiday.
Keyesta Sherman, Chamber of Commerce president, said her staff fields numerous calls each month regarding the city’s retail establishments.
“We keep coupons here that we give out for our local retailers and there is a shopping map online listing all our retailers,” Sherman said. “We get with our retailers and tell them this is the time, if they want to ramp up their sales, offer specials and reduce their inventory, to offer specials and sales. We work with the Alabama Retail Association to make sure our retailers know what is exempt and that we encourage the public to shop locally.”
Sherman said her staff fields 50 calls each month about retail in general and an additional 80 to 90 calls asking about specific businesses.
“We try to keep tabs on what people want and need and are asking for and we are sure to share that with our retailers and the City Council.”
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