Alabama’s annual back-to-school sales tax holiday is fast approaching, and retailers throughout the state are gearing up to welcome customers for a weekend of savings.
The tax-free weekend starts at 12:01 a.m. the third Friday of July, and ends at midnight that Sunday. The state waives its 4% sales tax on school-related supplies and clothing, and more than 300 cities and counties waive their local taxes for the weekend as well.
Exempt items include:
- Clothing priced at $100 or less per article;
- School supplies valued at $50 or less per item;
- Books that cost $30 or less per book; and
- Tablets, laptops, computers and printers with a selling price of $750 or less.
“Customers shop both of my stores during the July holiday,” Player said. “The sales tax weekend is a big weekend for both.”
Most of the merchandise in Player’s side-by-side stores is exempt during the tax-free weekend, and she offers extra incentives to her customers to encourage them to take advantage of the sales tax holiday.
“We run an additional 10% off regular priced merchandise during the tax-free holiday,” Player said. “This gives customers a bit more incentive to buy fall merchandise early.”
While the sales tax holiday is marketed mostly to back-to-school shoppers, consumers can also find savings in some unexpected places. Brenda Meadows’ store, The Lingerie Shoppe in Mountain Brook Village, is one example.
Meadows sells bras, panties, pajamas and other loungewear, but most of the inventory in her store is under $100 and qualifies for the tax exemption as well.
“For me, it is a huge convenience not having to collect the sales tax,” Meadows said. “Plus, I think it adds a bit to what the customers want to spend.”
For some retailers, the sales tax holiday may be less of a draw because of their hours of operation. Meadows still sees a lot of sales tax holiday traffic in her store, but even she isn’t open for the entire weekend.
“We are not open at night or on Sundays, so we get the Friday and Saturday traffic just until we close at 5,” Meadows said.
Goodmans, a personalization business in Florence that sells clothing, backpacks and lunchboxes, isn’t open on the weekends, so it sees sales tax holiday traffic only on the Friday of the statewide event.
“We may get a mother whose kid is going to (the University of North Alabama) for the first time or a student who doesn’t have a t-shirt,” Lisa Goodman, co-owner of Goodmans, told Alabama Retailer in its latest edition.
Many retailers saw a decline in sales during the 2020 back-to-school sales tax holiday due to the COVID-19 pandemic, but Player is hopeful that business will be back up this year during that weekend.
“With the state being completely open and more kids attending school this fall, I expect that sales will increase compared with 2020,” she said.
Player is not the only one feeling optimistic about the 2021 back-to-school sales tax holiday either.
“In general, business is just so much better than it was last summer,” Meadows said. “I think it will be helpful that people are back out and shopping.”
Retail continues to play a significant role in Alabama’s economic recovery from the COVID-19 pandemic. The expected increase in sales during the 2021 back-to-school sales tax holiday highlights the role of retail in that recovery. Customers save money and stores get more traffic, both in-store and online.
By Emma Holmes
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Originally posted June 28, 2021