Retailers count on tax 'holiday' for bump in sales
Updated On: Jul 30 2014 08:40:00 AM EDT
The Florida Retail Federation fully supports the upcoming three-day sales tax "holiday" on back-to-school items, with stores expecting to see a 30 percent increase in sales for the weekend.
However, the retail-industry lobbying group would have preferred the holiday period to be, as Gov. Rick Scott requested, at least a week longer. The three-day period begins at 12:01 a.m. Friday.
"Not everybody gets paid on the same schedule," said John Fleming, a spokesman for the group. "The people who get paid at the end of the month, they'll be fine. But there are people on that two-week cycle of paychecks. And we have always thought if you extend it to two weekends in a row you'd get more people to take advantage."
Still, even at one weekend --- the same length lawmakers set the previous four years --- retailers should see an increase in shoppers from 2013 because of a couple of changes, according to state economists.
The first change raises the tax-free bar on clothing, bags and backpacks from a maximum of $75 per item to $100.
The second waives the collection of sales taxes on the first $750 of computers and related gear, regardless of the overall price of the electronics. Last year, when computer equipment was first introduced into the discount period, items had to cost less than $750.
"I do think it's going to allow (electronics retailers) to sell more of their product line," Fleming said. "This expands the ability for people to buy what they need."
During the discount period, the collection of sales taxes will also be eliminated on certain school supplies costing less than $15 each, such as notebooks, pens and lunch boxes.
Florida economists have projected the "holiday" period will reduce state revenue by $32.3 million and local revenue to the tune of $7.3 million.
The projections are a jump from 2013, when a similar three-day "holiday" hit state revenue by $28.3 million and local government income by $6.4 million.
The projected increase this year is in part due to a higher demand for electronics.
The changes were included as part of the wide-ranging "patchwork of awesomeness" tax package approved by state lawmakers this spring. When combined with a rollback in vehicle-registration fees, the package gave Scott his election-year request for $500 million in cuts to taxes and fees.
The patchwork (HB 5601), so named by one of its chief architects House Finance & Tax Chairman Ritch Workman, R-Melbourne, offered a wide array of tax cuts. They included two other sales-tax holidays: discounts from May 31 to June 8 on hurricane supplies and another tax-free period that will run from Sept. 19 to Sept. 21 on the first $1,500 of the sales price of new Energy Star and WaterSense products.
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