MONTGOMERY – The back-to-school buying season, the second busiest shopping time of the year behind the winter holiday season, will boost sales in Alabama. Shoppers are certain to fill Alabama stores the first weekend in August when many of their purchases are tax free.
From 12:01 a.m. Friday, Aug.1, to midnight, Sunday, Aug. 3, the state’s four-percent sales tax is waived throughout the state, while sales taxes levied by 291 cities and counties also are waived on:
- clothing priced at $100 or less;
- school supplies valued at $50 or less;
- books that cost $30 or less; and
- computers and computer equipment with a selling price of $750 or less.
“Consumer spending will increase in August, and Alabama’s sales tax holiday will jump start back-to-school shopping in our state,” said Alabama Retail Association President Rick Brown. The National Retail Federation estimates that total spending on back-to-school and back-to-college will reach $74.9 billion this year. Alabama sales generally represent 1.5 percent of all retail sales nationally. If the national prediction is accurate, $1.12 billion will be spent to equip and outfit students in our state this year. The Alabama Retail Association predicts taxed sales in August will grow at least 2 percent over 2013 August sales, which means Alabama will spend about $4.32 billion next month. That is all sales, all month, not just on back-to-school.
Alabama’s sales tax holiday is for everybody, not just those going back to school. It is everywhere. The state’s four percent sales tax is waived throughout the state. Most retailers carry one or more of the items covered. Find out all you need to know about Alabama’s sales tax holiday at www.alabamaretail.org/alabamasalestaxholidays/
A record 291 cities and counties will add their sales tax savings to the covered purchases bringing the total savings for Alabama consumers during the upcoming three-day sales tax holiday to as much as 10 percent.
Sixteen states have back-to-school sales tax holidays with all but Mississippi holding their tax holidays in August. Eleven states will have tax holidays on the same weekend as Alabama, including Georgia, Florida and Tennessee. Compare Alabama’s sales tax holiday with other states’ holidays.
Alabama’s sales tax holiday means savings for more than just back-to-school shoppers. Those interested in filling out their wardrobes and stocking their libraries and home offices also can benefit from buying during the tax-free weekend. Such electronics as computers, laptops, e-readers and tablets valued at $750 or less along with computer software commonly used by students, flash drives, blank compact discs and printers are tax free during the sales tax holiday. While the holiday is aimed at the back-to-school shopper, it is open to everyone. (School supplies are tax free to the noncommercial user.)
However, not everything is tax free on the holiday weekend. A detailed listing of what is and isn’t taxed can be found on the Alabama Department of Revenue’s website or www.alabamaretail.org/alabamasalestaxholidays/. The Alabama Revenue Department’s Quick Reference Sheet lists what is taxed and what is not during the holiday weekend. It is a handy reference for consumers as well as a resource for retailers to put next to the cash register and provide to clerks.
Alabama’s sales tax holiday has grown in popularity each year. In fact, during seven out of the eight years, statewide sales tax collections for the month of August actually increased over the year previous. The average increase on August taxed sales in Alabama since the sales tax holiday was created in 2006 is 2.3 percent.
Even businesses that do not sell the tax-free items can see a jump in sales as customers get in and stay in the shopping mood all weekend. “Stimulating sales is what this weekend is all about,” said Brown. “As it has in the past, we expect the sales tax holiday to boost retail sales and spur purchases in other segments beyond the tax-free items.”