Sales Tax Holiday Begins August 3rd
The South Carolina Retail Association (SCRA) (http://www.scretail.org/) has announced that the 12th annual Sales Tax Holiday will run from Friday, Aug. 3 at 12:01 a.m. through Sunday, Aug. 5 at 11:59 p.m. Due to the success of the previous tax-free weekends, the South Carolina General Assembly has set aside one weekend free of sales tax on back-to-school related items such as pencils, paper, backpacks, textbooks, computers, shoes and clothing. The three-day event is popular among South Carolina consumers because it provides a tax break as they make necessary purchases for school or college.
Credible studies show that rather than costing states money, the Sales Tax Holiday increases state revenues through sales tax on ancillary purchases, such as trips to the food court and increased hotel bookings in areas around popular shopping centers, as well as increased jobs and payroll taxes that come from this event.
For example, one study conducted by The Washington Economics Group, Inc. (WEG) compared the actual 2010 Sales Tax Holiday data in one state with a 2009 study of the predicted impact on that state’s revenues when there was not a holiday (also performed by WEG). The final analysis confirmed that contrary to conventional wisdom, the 2010 three-day holiday resulted in an increase in tax revenues of $7 million, based on increased sales of taxable items of $115 million.
Overall, total sales during August 2010 for goods impacted by the tax holiday were $293 million, an amount larger than it would have been without the holiday weekend. On average, retailers added 8,300 payroll hours over the three-day event.
According to a 2012 back-to-school spending survey conducted by BIGinsight for national retail trade associations, the average person with children in grades K-12 will spend $688.62 on their children this summer, with most purchases going to clothing, accessories and electronics.
Another study done by the International Council of Shopping Centers (ICSC) showed that households will spend 42 percent more on back-to-school items this summer compared to 2011. Some 44 percent of respondents said they would spend the same as last year, and only 14 percent indicated that they would spend less. Approximately 83 percent of the respondents said they will support discount stores.
The retail industry is South Carolina’s leading employer and supports approximately 421,366 jobs in the state.
For more information on the Sales Tax Holiday, visit http://www.scretail.org/.