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Florida back-to-school sales tax holiday may not be enough to lift sales

Retailers are dug in for another weak back-to-school season thanks to high unemployment and not as much help from Florida's short sales tax holiday, one weekend Aug. 13 through 15.

Publicly, retailers appreciate the Legislature's largesse. Privately, some executives fear they need more of a lift this year, like the 10-day holidays of old that also applied to higher-ticket goods.

"But three days is better than none," said Rick McAllister, chief executive of the Florida Retail Federation, the trade group that convinced state leaders that reviving sales tax holidays would somehow stimulate more spending and jobs rather than be another tax giveaway.

Florida is one of 15 states staging a back-to-school tax holiday this year.

While they proved a hit with shoppers, tax-free shopping days are also big with politicians who like to pander to voting blocs. In drafting what qualifies in Florida, legislators tried without success years ago to limit the benefits to families.

In November, South Carolina declared a tax holiday on firearms sales. Louisiana will offer a tax-free September weekend for hunting supplies: guns, camo outfits, knives, off-road vehicles and duck blind repair.

Despite seven fewer days, officials this time expect Florida back-to-school shoppers will avoid $23 million in state and local sales taxes. That's down from $35 million in the last one in 2007, which stretched over two weekends.

The shorter holiday prodded retailers to turn up the volume on their own back-to-school discounting and promotions to extend the season well beyond a single weekend rush a week before school resumes in most Tampa Bay counties.

Beall's Department Stores, for instance, mailed customers a booklet with a month's worth of sale coupons to lure them.

"Because so many people live paycheck to paycheck today, it's important to help spread their buying over more than one weekend," said Mary Beth Fox, vice president of marketing.

And its ads focus on the practicality of double-duty clothes good for class and play.

While earlier forecasts envisioned up to a 5 percent uptick in sales, some market research experts cited recently flagging consumer confidence to lower their forecast to a 1 to 3 percent gain over last year.

"Since May, the number of shoppers who plan to spend less than last year doubled to 24 percent," said Britt Beemer, Orlando-based president of America's Research Group. "Half say they will buy only what they must, so they're replenishing the basics. More parents say they will be involved in buying for their teens. That means more Kohl's and Walmart and less Abercrombie & Fitch, Hollister and American Eagle.

Even the National Retail Federation's more optimistic forecast — the average planned family budget is up $58 to a three-year high of $606 — is based largely on parents who scrimped last year being unable to keep their growing kids clothed in old outfits and shoes again.

Fact is, increased corporate productivity and profitability and stability in the stock market and banking has not ended layoffs or loosened hiring.

"The economists have seen the signs of recovery," Mike Ullman, chief executive of JCPenney, told me, "the consumer has not."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Fast facts

Back-to-school tax holiday

When: Aug. 13-15.

What you'll save: State and local sales tax on most apparel, backpacks and accessories priced $50 or less or school supplies priced $10 or less. There's no limit on how many tax-exempt items may be purchased.

Rule of thumb for what's tax exempt: Products that conceivably could be used at school qualify. So aerobic or marital arts clothing are exempt, but skin diving suits are not. Book bags and backpacks are exempt, but luggage is not.

Source: Florida Department of Revenue

Florida back-to-school sales tax holiday may not be enough to lift sales 08/02/10 [Last modified: Tuesday, August 3, 2010 11:49am]
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