Short sales tax respite is coming

Short sales tax respite is coming

July 24th, 2012 in Opinion Times

Residents of Tennessee and Georgia who want -- need -- to save money on back-to-school expenses might consider postponing shopping for a week or two. The savings could be considerable for parents and others who buy selected clothing, school supplies and computers during the states' special sales tax holidays in August.

Tennessee will observe its holiday Aug. 3-5, and Georgia will hold its holiday on Aug. 10-11. There are slight differences in rules, but the moratorium in each state allows consumers to purchase the exempt items -- within clearly stated and reasonable limits -- without paying sales tax. The tax holidays are welcome.

Families with kids in school -- particularly those with youngsters who seem to outgrow clothing every other week and who go through mountains of school supplies -- can save considerable sums. That's especially true in Tennessee, a state without an income tax and where aggregate sales tax in some jurisdictions is nearly 10 percent. At a time when family budgets are under economic strain from rising food and other costs, the opportunity to save can be a godsend.

Parents aren't the only ones who benefit from the sales tax moratorium. The savings are not limited o those with school-age offspring. The tax exemption is available to all shoppers who purchase qualified items during the states' holidays. Retailers obviously benefit, too. They've got to be happy that the tax holiday will bring customers through their doors and, more likely than not, increase overall spending by consumers. And politicians have to be overjoyed. They truthfully can crow to constituents about how hard they worked to help save them money.

Both states have done excellent jobs in publicizing the tax holiday. Each has a helpful website (www.tntaxholiday.com in Tennessee and www.dor.ga.gov in Georgia) and toll-free phone information lines (1-800-342-1003 in Tennessee and 1-877-423-6711 in Georgia).

Welcome as a tax holiday is, it helps consumers only a couple of days during the year. Every other day, shoppers must pay sales tax. That is especially burdensome in Tennessee, which, unlike Georgia, has no income tax. Consequently, heavy reliance on sales tax to fund stand expenditures requires Tennesseans of modest means to spend a disproportionate share of their earnings on sales taxes rather than necessities. The holiday saves them a bit of money, but not enough. They need more relief.

Such help will arrive only when Tennessee's legislators address long-term reform -- including institution of an equitable tax on income. Until that time comes, state residents will have to be satisfied with the small gift of savings that the sales tax holiday provides.