End of efficient appliance deal looms for NC retailers, customers

rbutt@newsobserver.com eportillo@charlotteobserver.comOctober 31, 2013 

  • What’s tax-exempt

    The N.C. Department of Revenue says Energy Star-labeled appliances including washers, freezers, refrigerators, central air conditioners, room air conditioners, air-source heat pumps and ceiling fans, are exempt from sales tax this weekend.

    The Energy Star appliances – which often cost more, but are more energy-efficient – must be bought for immediate delivery, meaning consumers who request delayed shipment are not eligible for the exemption. Business purchases aren’t eligible either.

    Ely Portillo

North Carolina appliance retailers are hoping to cash in on the state’s last tax-exempt weekend for qualified Energy Star appliances, which they say has become one of their busiest weekends since it was introduced five years ago.

From Friday through Sunday, customers won’t have to pay sales tax when they purchase energy-efficient washers, freezers, air conditioners and other major appliances. In Wake County, that means an extra savings of 6.75 percent, while shoppers in Orange County can save 7.5 percent.

Independent retailers said tax-free weekend has been an important push for store sales and traffic flow.

“It’s definitely a good boost, a shot in the arm,” said Randy Pleasant, co-owner of Garner TV & Appliances in Raleigh. “We’re already seeing people coming in to pre-shop, and they'll be ready to purchase on Friday morning.”

The N.C. Department of Revenue estimates the appliance program resulted in $1.6 million worth of lost tax revenue statewide last year.

In August, the state held its final back-to-school tax-exempt weekend, which offered discounts on items such as clothing, backpacks and computers. That program came with an estimated cost of $13.6 million in lost tax revenue.

Both programs are ending as a result of tax changes this year passed by the N.C. General Assembly. Opponents said the tax-exempt weekends cost the state revenue and just shifted consumers’ purchases from other times to those weeks.

The North Carolina Retail Merchants Association has been pushing to keep the program, citing research that shows consumers who often use the additional savings from their tax-free purchases buy more goods.

Merchants said they’ll miss the sales bump.

“Sometimes folks would place orders for a fridge or dishwasher that they didn't intend to replace, but would do so for the savings,” said Bill Ginsler, appliances specialist with Kitchen & Bath galleries, which has four stores in the Triangle.

Without the tax-exempt pricing, some retailers say they plan to come up with other discount and promotions that are similar to the program. Pleasant said Garner TV & Appliances is considering holding its own "in house" shopping weekend next year that offers similar incentives to the tax free program. But the retailer doesn’t yet have a clear plan of how that might work, he said.

Wilkinson Supply, a family-owned bath and kitchen appliances retailer in Raleigh, adopts a unilateral pricing strategy.

“Typically the discount we give to consumers is the lowest price we're allowed to sell for,” said Courtney Kane, serving manager with the retailer.

Kitchen & Bath Galleries also offer manufacturer rebates and discounts to contract distributors. But Ginsler said the company is less certain about how it plans to make up the shortfall next year.

“In this economy, we do the best we can day by day,” he said.

Butt: 919-829-4523

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