Retailers celebrate sales tax holiday

Retailers celebrate sales tax holiday

August 5th, 2011 by Kevin Hardy in News

MacAuthority employee Ben Cairns enters a computer preorder into the store's sales system on Thursday at Hamilton Place mall. Cairns says the sales tax holiday in Tennessee is the biggest weekend of the year for MacAuthority transactions, far bigger than even the Friday following Thanksgiving.

Photo by Alex Washburn /Times Free Press.


• When: Purchases made between midnight Friday and midnight Sunday are eligible

• What's covered: In Tennessee, clothing worth less than $100 per item, school and school art supplies worth less than $100 per item and computers with a price tag of $1,500 or less. In Alabama, clothing worth less than $100 per item, school and school art supplies worth less than $50 per item, books with a price tag of $30 or less and computers selling for $750 or less.

• Effect on counties and cities: Tennessee reimburses local governments for lost tax revenues, while Alabama allows cities and counties to opt in or out of the tax-free holiday, meaning some Alabama purchases still could be subject to local sales taxes.

Sources: Tennessee and Alabama revenue departments

Tennessee and Alabama shoppers are poised to save millions this weekend as the two states continue their back-to-school sales tax holidays.

The three-day sales tax hiatus applies to school supplies such as notebooks, pencils and art supplies as well as many electronic products such as personal computers.

The draw of potential savings -- upward of 10 percent on eligible purchases in Tennessee -- has retailers comparing this weekend to the frantic madness of Black Friday, the day after Thanksgiving.

This marks the second year in a row that Georgia's Legislature, citing the loss in revenue, hasn't authorized a sales tax holiday.

Analysts estimated Georgia lost upward of $13 million on its sales tax holiday, while the Tennessee Department of Revenue predicts a loss in sales tax revenues of $8 million to $10 million for the weekend. Estimates weren't available for Alabama's losses, because local cities and counties can opt out of offering the sales tax break.

Some Southeast Tennessee retailers are hoping that Northwest Georgia residents will flock to their stores this weekend to take advantage of the savings.

"This is our biggest weekend of the year. It's huge for us," said Lisa Longacre, manager of MacAuthority in Hamilton Place mall. "The best part about it is, you've got Georgia who no longer offers the tax-free weekend."

Longacre said the Apple computer retailer expected a midnight shipment overnight of laptops, desktop computers and iPads, all of which are exempt from sales taxes -- if they're marked at or under $1,500. To lure customers, MacAuthority has marked down many items, including previous-generation computers, so they come in under the $1,500 mark.

She said employees have collected pre-orders over the past two weeks to help expedite purchases over the weekend.

While customers can save on pencils and erasers, the biggest potential savings are in electronics. Donald Key, manager of Office Depot at 5600 Brainerd Road, said stores like his benefit doubly because they sell both school supplies and computers.

"It's a huge deal for us right here," he said. "This weekend competes with Black Friday. The only difference is there's three days of it."

To keep up with anticipated demand, his store has gathered computer stock from states across the Southeast that don't have tax-free weekends, he said. And while the tax hiatus is centered around the back-to-school season, Key said computer buyers this weekend will include families, professionals and college students.

"It's everybody," he said. "It's across the board."

Hamilton Place spokeswoman Catharine Wells said mall stores are being much more aggressive in their sales this year to draw in more customers.

"Not only are they cutting the tax, but they're being much more competitive with their prices," she said.

To accommodate more customers, the mall is offering extended hours this weekend along with extra janitorial and security staff, Wells said.

"We're ready for the crowds," she said.