Here in Texas we are coming upon our Tax Free Holiday Weekend. For those who may be unfamiliar with the “holiday”, it is a time when the state of Texas suspends collecting sales tax from consumers on specified school related items, such as clothing, backpacks and school supplies.
The primary goal for the event is to provide consumers with an added incentive to get out and back to school shop. As a parent of two boys, this hilarious, because back to school shopping was mandatory every year due to growth spurts and changing class supplies requirements.
Tip #1: Shop early for the best selection, especially if your child is in a size that sells out quickly or is on trend .
Are we saving money?
Well that is the REAL question. And the answer is…maybe. In its purest form, the answer would be a definite yes. Shoppers would save money usually spent on sales tax, so for Texas about $8 for every $100 spent. It has been estimated most shoppers spend an average of $630 on back to school for elementary up to high school aged children. In that case, the average shopper would save about $52.
Not a lot, but it is something.
So what’s the down side?
There are critics of the program, mainly because it is not as “cut and dry” as it sounds. A secondary goal of the holiday is to boost state revenues by getting shoppers to make impulse purchases on non-sales tax exempt items. That does not always happen. Many states report losing money on sales-tax free holidays, because consumers are specifically buying sales tax free items, with very few “impulse” purchases.
Yet another concern is the holiday shifting consumer purchases and not providing additional economic growth. People are smart. Instead of purchasing back to school items before or after the holiday, and paying sales tax, consumers wait. Again, $52 is not a lot but it could be an extra pair of jeans or shoes or extra supplies for later on in the year.
Also, not all retailers are passing the full tax-free savings on to the consumer. Unfortunately, some keep a portion of the savings for themselves by raising prices on sales tax free related items during the holiday. For example, an item before the holiday cost $50, but during the price is increased to $52. The retailer takes a piece of the sales tax savings the consumer was supposed to have.
Despite the concerns, states continue the holiday, primarily because it remains popular with shoppers and is inching into becoming a “tradition”.
Tip #5: Be sure to stock up on items when the back to school season is over. Leftover school supplies are deeply discounted to make room for the next season.
♥♥♥ Happy sales tax free shopping ♥♥♥
Hey do you have any sales tax free success stories or tips you would like to share? If so, email them to me, or message me on Facebook. I would love to feature some of the tips I receive in a future blog.
Until Next Time…
Thanks and Be Blessed
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Disclaimer
When is your state’s tax free weekend? Check out this link https://www.retailmenot.com/blog/tax-free-weekend.html