Final tax holiday spurs shoppers

lfinaldi@newsobserver.comAugust 6, 2013 

Triangle retailers are still tallying sales figures from this weekend’s sales tax holiday, but most said traffic was up over last year – an increase credited to this being the holiday’s final installment.

At TigerDirect, an electronics retailer in Raleigh, store manager Rodolfo Bottinelli said he expects sales on computers, printers and tablets will be up. Bottinelli said the store was fully staffed for the three-day holiday, with 30 percent to 40 percent more people on the floor.

“We were very, very busy, and it was very good for our store,” he said.

Since its inception over a decade ago, the tax holiday has provided a boost for North Carolina retailers and given families a break on their back to school shopping. But lawmakers eliminated the tax holiday as part of their overhaul of the state’s tax laws this session. The law also ends the state’s Energy Star tax holiday, which exempts energy efficient appliances from sales tax. The last one will be Nov. 1-3.

Andy Ellen, president of the N.C. Retail Merchants Association, said the hype around the last back-to-school sales tax holiday probably helped boost sales.

Ellen said retailers were reporting lots of purchases, especially computers.

At Crabtree Valley Mall, marketing director Christy Alphin said foot traffic was up a percent and a half over last year. The mall will not know sales figures until early September.

“We’ll take anything we can get. One percent can actually translate to a decent number of people,” Alphin said.

She said the holiday also drives business to higher-end stores in the mall where the tax exemption does not apply. For clothing, items had to cost $100 or less to be exempt.

“If they’re a store that doesn’t have the ability to do tax-free, usually they’re not seeing the back to school shoppers, although the increase in traffic overall will help them,” Alphin said.

Shoppers in Durham and Orange counties got an additional 2.25 percent tax break, while Wake County shoppers saved an extra 2 percent. At The Streets at Southpoint mall in Durham, free bags given out as a marketing promotion were gone within two hours of opening. Marketing manager Ashley Warrick said she thinks the mall will persevere next year without the tax holiday because of promotions at different retailers.

Some businesses, however, reported a slight slowdown. At the N.C. State Bookstores, associate director Anthony Sanders said foot traffic was steady but sales were down about 5 percent. He said some people may have been confused about when exactly the holiday was ending.

“I think some people got the message that this was the last go around,” he said. “Some people may have thought it was already dead.”

The Bookstores did, however, sell about 80 more computers than they did last year, Sanders said.

Trevor Johnson of the N.C. Department of Revenue estimated that the state lost about $13.4 million in taxes this past weekend but cautioned the exact number won’t be available for awhile. Last year’s holiday cost the state about $13.3 million in taxes, according to the latest estimate.

Proponents of the holiday’s end say in recent years it has veered too far away from its original intent of giving a spending break to parents of schoolchildren.

Amy Auth, a spokesperson for Senate President Pro Tem Phil Berger, pointed to the new tax law’s reductions in the state income tax as a means of putting money back into the pockets of consumers.

“This more than offsets one-time savings from a weekend sales tax holiday,” Auth wrote in an email.

But Ellen said he is worried about how the holiday’s end will affect retailers.

“We think that people in the border counties will go across the line to all the surrounding states that have the sales tax holiday, or you’ll stay home and shop on your couch,” he said. “North Carolina will lose all those sales.”

Finaldi: 919-829-4582 or twitter.com/lauraefinaldi

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