Back-To-School Season Raises Concerns For Shoppers, Retailers | WABE 90.1 FM

Back-To-School Season Raises Concerns For Shoppers, Retailers

Jul 17, 2017

Without the tax-free weekend, shops that sell clothing, electronics and school supplies may see fewer customers in their stores than previous years.

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The annual back-to-school tax-free holiday was scheduled to take place July 29-30, but Georgia lawmakers have not passed any legislation to reinstate that holiday.

“It’s a disappointment,” said Denisha Stewart, who lives in Gwinnett County.

Shoppers like Stewart are used to stocking up on school supplies, clothing, footwear and electronics before sending their kids back to school.

“I think people look forward to tax-free weekend more than or just about as much as Black Friday,” Stewart said.

In addition to tax-free weekend, many stores host back-to-school sales, which bring in more customers.

Clifford Kates, a store manager at Shoe Dept. Encore at Northlake Mall, said missing out on tax-free weekend will impact his sales.

“We have two weekends in a row that are extremely busy,” Kates said, “So if you take away one of those weekends, it’s not going to be as much.”

In 2014, Gov. Nathan Deal signed House Bill 958, which extended the back-to-school tax-free weekends for two more years. That legislation expired this year. The Georgia Retail Association lobbied for the annual tax holiday to be reinstated but was unsuccessful in securing legislation.

Tax Foundation, a Washington, D.C.-based think tank, argues against tax-free holidays and other temporary tax policies.

In its 2016 report on sales tax holidays in the United States, Tax Foundation argues that tax-free holidays do not provide significant boosts to the economy and in the end, burdens both the consumer and the retailer.

Eliminating sales tax increases demand for a product and may cause prices to rise, so shoppers may not be saving money after all, according to the report.

According to Tax Foundation — whose stated mission is to work toward “a world where the tax code doesn’t stand in the way of success,” according to its website —  Georgia began tax-free holidays in 2002 and continued until 2009.

There were no tax-free holidays in 2010 and 2011, but they were reinstated in 2012.

Cynthia Jones, a Macy’s employee at Northlake Mall, has worked multiple tax-fee holidays and said customers seem to have enjoyed the savings.

“Our (prices) have pretty much remained the same,” Jones said. “I haven’t noticed anything going up. It seems like it balances itself out to me.”

Tax Foundation says tax holidays are stand-ins for a more permanent tax reform.

“If a state must offer a ‘holiday’ from its tax system, it is an implicit recognition that the state’s tax system is uncompetitive,” according to Tax Foundation. “If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.”