Are sales tax holidays working in Florida?

Published On: Jul 25 2014 05:51:48 PM EDT
TALLAHASSEE, Fla. -

Another sales tax holiday hits Florida next week, and don't tell the kids because it's for back-to-school supplies.

The legislature and governor promised to save Floridians $500 million this year. Part of it is through sales tax holidays.

"House Bill 5601, which does a lot of things, including putting $121 million back in Florida family's pockets," said Gov. Rick Scott on the Florida Channel.

The first sales tax holiday was for hurricane supplies in the first week of June. Florida's revenue estimating conference said shoppers saved about $2.7 million in sales tax this year, but supply store manager Tyler Gouldbourn didn't notice.

"Despite the tax break, I did not see a large increase in business related to generator sales or really even inquiries related to generator sales," said Gouldbourn.

The Florida Retail Federation said the next sales tax holiday is where they expect the most bang for the buck. A back-to-school break starts Aug. 1. Customers will be free of Florida's 6 percent sales tax on clothing, footwear and accessories that cost less than $100.

"The legislature estimates that the tax holiday alone will save Floridians about $40 million statewide this year," said John Fleming, of FRF. "It could easily be much higher when you add on the sales and markdowns."

The FRF said an economics study from four years ago provides the answer as to whether the holidays work. It compared the tax-free shopping from 2010 to 2009 when there was no sales tax holiday.

"What we saw was that the sales did go up for the entire month in the year that we had the tax holiday, much more than they would have been we think without the tax holiday," said Fleming.

The study also showed that the state made about $115 million more that year in tax revenue during the three-day tax-free period, meaning shoppers were more inclined to buy items that weren't tax free.

The school supply sales tax holiday runs from Aug. 1 through Aug. 3. In September, Floridians will have the chance to buy energy efficient appliances tax-free for a three-day period.

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