Tax-free shopping returns
Published 8:58 pm Wednesday, August 3, 2016
This weekend will mark the 10th anniversary of the commonwealth’s annual sales tax holiday for school supplies, clothing, select appliances and hurricane and emergency equipment.
“This tax holiday saves consumers 6 percent on qualified items in Hampton Roads and Northern Virginia and 5.3 percent in the rest of the state,” Ray Mattes, chief executive officer and president of Hampton Roads’ Retail Alliance, stated in a press release.
Prior to 2006, many Virginians traveled to North Carolina and other states to get their back-to-school items without paying Virginia sales taxes.
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As a result, “the state started to lose significant sales in the first week of August,” said Laurie Aldrich, executive director of the Virginia Retail Merchants Association.
In response, the Virginia Retail Federation, the statewide arm of the Retail Alliance and Richmond’s Retail Merchants Association, proposed the back-to-school tax holiday to the General Assembly. Former Gov. Tim Kaine signed the bill into law in June 2006.
The bill set the first weekend of August as the commonwealth’s back-to-school tax holiday.
In the years to follow, the Energy Star and Water Sense and hurricane preparedness tax holidays were also implemented. The Energy Star and Water Sense tax holiday was designated for October each year, and the hurricane preparedness tax holiday in May.
However, last year, Virginia’s legislature combined the three sales tax holidays into the first weekend in August.
Aldrich said her association had preferred to have the tax holidays separated, because that setup was “better for the consumer.”
“The bill was passed as a cost-saving measure,” she said.
However, since the introduction of tax-free weekend, Aldrich said “there has been a significant increase in sales, and it hasn’t tapered off.”
Managers at local stores agree that the tax-free holiday is great for the consumer. In particular, the Energy Star and Water Sense tax exemptions help consumers two ways — by helping them save on taxes and encouraging them to “switch out their older items for new energy-saving appliances,” said Steve Poole, store manager of the Lowe’s on North Main Street.
Sales of school and college supplies are expected to rise from $68 billion to $75.8 billion this year, according to a Retail Alliance press release.
Many retailers opt to put everything in their stores as tax-free during the weekend, stated Kate Baker, director of government affairs at the Virginia Retail Federation, in an email.
However, retailers that choose to do so must remit the state’s sales tax amount for the non-exempt items out of their own pockets.
In years past, the Retail Merchants Association has proposed to incorporate tax exemptions for electronics during the holiday, but that effort has so far been unsuccessful, according to Aldrich.