Final tax-free weekend begins; retailers worry about future
Posted August 2, 2013 5:50 a.m. EDT
Updated August 2, 2013 4:05 p.m. EDT
Raleigh, N.C. — North Carolina's final sales tax holiday began Friday, offering savvy shoppers a chance to save some change on items ranging from school supplies to wedding dresses.
But when retailers lock their doors Sunday, the tax break ends for good.
The General Assembly repealed the sales tax holiday as part of a tax overhaul plan approved last month. The overhaul also brings to an end an annual tax-free weekend for buying Energy Star appliances.
Stores began offering tax-free items at 12:01 a.m., and the weekend deals will end at 11:59 p.m. Sunday. Participating in the sales tax holiday is required; retailers cannot opt out.
The popular event exempts from state and local sales tax clothing, footwear and school supplies of $100 or less per item; school instructional materials of $300 or less per item; sports and recreational equipment of $50 or less per item; computers and tablets of $3,500 or less per item; and computer supplies of $250 or less per item.
Basic eReaders, which do not provide Internet access, do not qualify as tax-exempt items.
Retailers say this is the busiest shopping weekend of the year outside Black Friday after Thanksgiving.
"I think people should definitely come out and try to take advantage of it because, unfortunately, this is the last one. I'm sure it saves a lot of people money," said Vicki Smith, who was shopping at a Target in Fayetteville.
Stephanie Rivers, a school principal and a mother, said she hopes to save $100 to $200 by shopping during the tax holiday.
"It stinks," she said of the move to end the annual event. "This was a nice benefit and bonus for the citizens of North Carolina.”
A year ago, North Carolina lost more than $13.5 million in tax revenue during the weekend. It was one of 48 tax breaks erased as part of the state's tax overhaul.
Angel Simmon said she backs lawmakers' decision to reduce income taxes, even if that means scrapping the sales tax holiday, which she says doesn't save her much money.
"Not too much, not to make it worth that," Simmon said. "If they can cut this, I'm fine with that. That would be all right."
Kelcey Allen, a mother of a 6-year-old and a soon-to-be teacher, said she thinks the tax-free weekend actually makes money for the state.
"They're trying to make ketchup a vegetable. There are just budget cuts all over the place," Allen said. "I think they'll lose money doing that because people are going out, they're spending money, they're buying, going out to eat."
The president of the North Carolina Retail Merchants Association said Thursday that he thinks shoppers will head across the borders to Virginia, South Carolina and other states in 2014 to complete their shopping lists without worrying about sales tax.
Andy Ellen said Wilmington-area shoppers might head to Myrtle Beach, S.C., or Triad residents or those in northeastern North Carolina might go Virginia. He also said people could save the gasoline altogether and shop online.
"It's the only weekend of the year that the retailers are on a level playing field with the Overstock.coms of the world," Ellen said, referring to the online discount shopping website.
Bill Wertz, a regional manager with Wal-Mart Stores Inc., said retailers will have to be more creative to try and generate back-to-school shopping buzz in 2014 and beyond.
"The challenge will be even greater for us without the sales tax holiday," Wertz said. "We're going to be challenged to keep our prices low because customers will need that more than ever."
Visit the Department of Revenue's website for a complete list of items included in the tax-free holiday.