Sales tax holiday coming soon

Published 2:19 pm Monday, July 21, 2008

The Alabama sales tax holiday is back this year for most southwest Alabama counties.

Originally designed to stretch the pocketbook of back-to-school shoppers, it triggers shopping sprees of impressive proportions, particularly when coupled with individual store sales.

“If shoppers will make themselves aware of the details of this holiday now, then they will be in for a more pleasurable shopping experience when August rolls around,” Kelley Smith, Demopolis Area Chamber of Commerce president, said. “Last year’s event saw a definite increase in local foot traffic and this year merchants are anticipating a definite increase in local sales.”

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During the three-day sales tax holiday — in effect from 12:01 a.m. Friday, Aug., 1, to midnight, Sunday, Aug. 3 – shoppers across the state are exempt from paying the 4 percent sales tax on certain school and office-related items. They are:

Clothing priced at $100 or less.

School supplies priced at $50 or less.

Books under $30.

Computers and related equipment at $750 or less.

“Anyone can buy those items tax free,” said Nancy Dennis, spokesperson for the Alabama Retail Association.

More than 230 cities and counties in Alabama have opted to suspend their local sales tax as well, including the cities of Demopolis and Linden, in addition to Marengo County.

When a municipality suspends taxes, shoppers can save as much as 10 percent.

Even though sales taxes were suspended on some items, the state of Alabama saw an overall spike in tax revenue generated during previous tax-free weekends. Sales tax receipts increased 10.4 percent in 2006 compared with the same weekend in 2005; in 2007, it jumped an additional 4.6 percent, according to the Alabama Retail Association.

Alabama is one of 15 states that with a sales tax holiday. Mississippi does not have one.

State and local business leaders are looking to this weekend to be a boost to retail economies that have recently experienced some hard times.

“It has been a trying summer for many local merchants,” Smith said, “but we have high expectations for the ‘back to school’ kick-off.”