Sales Tax Holiday

As most of you know I am a retail merchant and tomorrow is the first day of the sales tax holiday. Most of you also know that often called the tax holiday a gimmick to cover for the fact that our legislature does not know enough about retail sales to know that a permanent reduction of the tax rate from 7% to 5% would increase economic activity. It is a bunch of arrogant politicians telling us to shut up and be happy with a temporary break on a few select select items.

Sales in my store has been down for the last few weeks for obvious reasons. One reason is that the customers have very little money. Another reason is that they are saving the little the still have so they can do a months worth of shopping on one weekend. This does not increase sales. It only bunches sales up.

I do not know what problems I will have tomorrow, but one that I predict is people thinking it is a total tax free day. There is still tax on most items and on every item over $100. I can also see problems when merchants file the monthly statement and give money to the state.

I admit that I do not write as much as I once did. I am busy. I will however follow up on this story. When the tax holiday happens, I will report the results from a merchants point of view.

------------------------update August 10-------------------

The only surprise about the sales tax holiday was that it was not as much trouble as I thought. I expected people to demand no tax on every thing. Most of my customers seemed surprised that I gave them a tax break on clothes. It was as though they recognized the whole thing as no big deal and they were correct.

My gross sales for the two days was only slightly better than they normally would have been, but the week before the event was a near record low. The weekly total was worse than normal. Most of the retail merchants I talked with said the same. In Magee, where my store is, the only store that I know had an in increase was Walmart.

Human nature is to shop locally for quick things and go to larger towns for buy a lot. It makes sense that a tax holiday would draw folks away from small town merchants. My mother went to Lakeland Drive on Saturday and told me the crowds were huge but she saw more lookers than buyers. She also noticed that most of the sales in the places she went were because they were bringing out the out of date and damaged merchandise. When she told me that, I had to admit that I did it too.

Now that the tax holiday is over for shoppers it is not over for merchants. We still have to file a report on the 20th day of the following month. I predict a lot of confusion from some and some cheating from a few too. What makes it worse is that the two day event was in two different months. There will be two months of confusion and cheating. It also tells me that the dates were picked by politicians and not merchants.

Some of my customers remember that I ran for state senate before and apparently a few think that I won. Someone asked me why I did not include school supplies when I voted on that bill. I asked if she voted for me and she said no. I said that is why I did not include school supplies. I was tempted to leave her hanging there but finally told her the truth. The truth is that I was not for the gimmick at all, because it is an excuse to not repeal the "temporary" increase in sales tax to 7%.

---------------------------------update August 21----------------------

I, like most retail merchants, file an online sales tax return each month on the 20th day. I thought there might be some special instructions on the form because of the tax holiday. There was not, so I just winged it. I opened the deduction schedule page and wrote in school clothes and told the declared amount of no tax sales for Friday. Next month I will do the same but declare Saturday sales.