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Sales tax holiday returns next week
State gives back-to-school shoppers a break
Staff photo by TIN NGUYEN
Shoppers browse at St. Charles Towne Center mall Thursday. Next week, shoppers will be able to take advantage of Maryland’s Tax-Free Week Aug. 12 through 18, during which the state doesn’t collect the 6 percent sales tax on some back-to-school items such as clothing and shoes.
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Back-to-school shoppers - and everybody else - can buy clothes and shoes a little cheaper next week, thanks to a sales tax holiday.
From Aug. 12 to 18, items of clothing and pairs of shoes costing $100 or less will be exempt from Maryland’s 6 percent sales tax. The 3-year-old measure is intended to coincide with school shopping.
A tongue-in-cheek video on the Maryland comptroller’s office website urges consumers to participate, warning of comically dire consequences waiting for those who don’t head to the stores. “Don’t Go to Jail, Shop Maryland Tax Free” features a hapless consumer who loses his girlfriend because he spent date money on sales taxes, then is arrested for smuggling cigarettes in an attempt to win her back.
In reality, tax-free week means crowded stores at the St. Charles Towne Center mall in Waldorf, said spokeswoman Lindsay Pitts, especially since some retailers time sales to coincide with the tax holiday.
“Back-to-school in general is a huge time for the shopping industry, and specifically at St. Charles Towne Center we see huge increases in traffic right before school starts. Traditionally for tax-free week, our numbers — we don’t have traffic counters or anything like that — you can see people shoulder to shoulder,” Pitts said.
The tax break seems to concentrate shopping in one week rather than boost consumption overall, she said.
“I think more so, people will hold off to shop during that time. [Before the week starts], you will see people browsing clothing, looking at school supplies or backpacks or whatever it is. ... You don’t necessarily see purchasing,” she said.
But the tax holiday can stimulate purchases just by getting people into stores as well as encouraging repeat shopping, said Kim Frum, spokeswoman for Comptroller Peter Franchot (D).
“Actually, because it’s coming in the middle of August, a lot of people are still on vacation, still in summer mode. It gets people thinking about going back to school or back to work and it helps drive foot traffic into stores that might be empty at this time of year, with people otherwise on vacation out of town,” Frum said. Shoppers also might return to newly discovered stores for Halloween or other holidays, or return for items they eyed but didn’t buy before, she added.
“The comptroller absolutely loves this time of year,” Frum said. “Especially, we’ve had so many tax hikes in the past few years. This is one time we give consumers a break: Here, get something, it’s tax-free week, knock your socks off, have fun with it.”
She stressed that despite the timing, school supplies still are taxed.
“No pens, pencils, paper, backpacks, duffel bags, none of that. Just strictly clothes and shoes. And it doesn’t have to be kids’ clothes either. You can go out and buy yourself a cocktail dress as long as it’s under 100 bucks,” she said.
The holiday likely will cost the state between $10 million and $12 million in forgone tax revenue, but this is just a rough projection that can’t be verified because retailers don’t report untaxed sales to the state, Frum said.
The week will be business as usual at The Carousel Store in Waldorf, which sells children’s clothing, including school uniforms. Parents tend to have done their shopping by August, owner Lisa Case said.
“A lot of people preorder their school clothes so I can’t really say where it makes a real big difference. I think a lot of people don’t want to wait for their school clothes,” Case said.
The comptroller’s office answers common questions about tax-free week online at www.comp.state.md.us/ShopMD_2012/shopmd-factsheet2012.pdf.
emitrano@somdnews.com