By Stephanie Schupska
University of
Georgia
Kids don’t usually need an incentive to go back-to-school
shopping, especially when it involves cool new stuff. Parents,
though, usually do.
Georgia’s providing a boost again this year with its fourth tax-
free holiday. The tax breaks will begin at 12:01 a.m.
Thursday, July 28 and end at midnight, Sunday, July 31. And
it’s not just parents who are looking forward to the tax
break.
“Customers call a month or two in advance to see when that
weekend is going to be,” said Jamie Waters, assistant manager
at a Goody’s Family Clothing store in north Georgia. “Sales
that weekend are just phenomenal.”
Goody’s moved up the grand opening of a new store in Commerce,
Ga., from August to the tax-free weekend to take advantage of
the sales.
Clothes and shoes are not the only items receiving a tax break.
Other items include school supplies costing $20 or less per
item, personal digital assistants not built into cell phones,
computers up to $1,500 per transaction and some computer
accessories and software. Children books and books that are on
an approved school reading list and cost $20 or less get a
break, too.
Digital cameras, cell phones, furniture and other recreational
systems don’t qualify for the tax break. Accessories like
watches, glasses and jewelry are also not tax exempt. But
clothes and footwear ranging from pantyhose and roller blades
to football pads and girdles are.
A complete list of what items are and aren’t tax exempt is
available www.etax.dor.ga.gov/salestaxholiday/index.shtml.
“Obviously, it’s an added incentive to anybody who’s
considering purchasing school supplies, computers and things
like that,” said Keith Kightlinger, a tax economist with the
University of Georgia Extension Service.“I think, especially
when you look at the fact that this is publicized in advance,
consumers can realize a substantial savings out of the tax-
break weekend,” Kightlinger said.
The tax holiday, which was originally designed to pull Georgia
out of an economic recession, favors certain sectors of the
retail industry, said Jeffrey Humphreys, director of the UGA
Selig Center for Economic Growth.
“Now the economy is comfortably out of the ditch,” he
said. “Georgia’s not leading the nation, but we’re still
growing.”
The increased spending over that weekend doesn’t necessarily
mean that consumers have more disposable income.
“Just because it’s a sales tax holiday doesn’t mean there’s
more money,” he said. “Also, the timing of the spending is a
bigger impact. There’s more spending during the sales tax
holiday with actually less spending before and after.”
In fact, sales are so great that some retailers compare the
weekend to other holidays.
“That Saturday actually rivals the day after Thanksgiving,”
said T.J. Maxx Manager Tim Alexander. “It’s a pretty good week
for us.”
While some have questioned the weekend’s effect on Georgia
economics, state press secretary Heather Hedrick says the drop
in tax revenues is something the state prepares for.
“This is something that the legislature considered when putting
together the budget,” she said.
The estimated state impact for 2005 is $10.38 million – the
amount consumers would have spent on Georgia taxes on all
items. The forecasted impact on local sales tax income is $6.5
million statewide. When added together, consumers save $16.88
million, money that would have gone into government coffers.
“[The weekend] benefits local retailers significantly,” Hedrick
said. “It encourages consumers to get out . . . to go out that
weekend and do their shopping.”
(Stephanie Schupska is a news editor with the University of
Georgia College of Agricultural and Environmental Sciences.)
