Aug. 3, 2012. Due to the success of the previous tax-free weekends, the North Carolina General Assembly has once again set aside one weekend free of sales tax on back-to-school related items such as pencils, paper, backpacks, text books, computers, shoes and clothing. The North Carolina Retail Merchants Association (NCRMA) is looking forward to the 10th annual Sales Tax Holiday today, Aug. 3 through Sunday, Aug. 5 and is anticipating a big shopping weekend.
“North Carolina’s annual Sales Tax Holiday is important to the state’s consumers and business owners, the retail market and especially to the overall economy,” said Andy Ellen, NCRMA’s president and general counsel. “It’s a popular tax break on back-to-school necessities for hard-working families. Shoppers enjoy the sales and savings, and retailers get a nice boost from it. It’s a win-win.”
The popular event exempts clothing, footwear, and school supplies of $100 or less per item; school instructional materials of $300 or less per item; sports and recreational equipment of $50 or less per item; computers of $3,500 or less per item; and computer supplies of $250 or less per item from sales tax. Tablet computers and netbooks of $3,500 or less per item qualify, eReaders, do not. Items are not necessarily exempt from sales tax just because they are required by a child’s school or sports team. Visit NCDOR’s website for a complete list of items that qualify.
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, major retailers also added 8,300 payroll hours over the three-day event.
“Without this weekend, the state’s business climate will suffer significantly as our residents will travel across state lines to shop tax-free weekends in other states,” said Ellen. “The retail business community always sees a significant increase in sales on Sales Tax Holiday weekend due to the the savings customers receive on specials offered by retailers, particularly on big-ticket items such as computers. This weekend is a great shot in the arm for retailers – both independents and chains – who are the largest private employers in North Carolina.”
NCRMA and state legislators initiated the Sales Tax Holiday to encourage North Carolina residents to buy from in-state retailers during the second busiest shopping season of the year.
For more information on the Sales Tax Holiday, visit ncrma.org or contact NCRMA at 919-832-0811.
The North Carolina Retail Merchants Association (NCRMA), a nonprofit trade association, was organized in 1902 to improve the business climate for retailers in North Carolina. Now, more than 100 years later, NCRMA is the voice of the retail industry in North Carolina. NCRMA represents the interests of individual merchants before the General Assembly and serves as a vital link to state government. Its credibility lies in its longevity and commitment to serving the ever-changing needs of its members. The Association’
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