Personal computers and accessories are expected to be popular items for families in the first year they are included in Florida’s tax holiday
TALLAHASSEE – For the first time this year, the Florida Legislature included personal computers and accessories as school supplies for Florida’s kids during the Back-to-School Sales Tax Holiday. Retailers are expecting that to give the popular tax holiday a significant boost this year, as families take advantage of tax savings and markdowns, said Rick McAllister, president and CEO of the Florida Retail Federation.
As in previous tax holidays, clothing and shoes up to $75 will be tax exempt, along with school supplies up to $15 from August 2 to 4. In addition, personal computers and accessories selling for up to $750 will be tax free.
“Most families in Florida own a computer of one type or another, and we expect that many will take advantage of the tax savings to purchase computers for their kids or upgrade their own. And you’ll see great deals on clothes, shoes and school supplies. It’s a winning proposition for Florida’s families and for our retailers, because we’ll see a good boost in commerce over the weekend,” McAllister said. “Stores are actively competing with each other for customers, and that usually means plenty of mark downs to attract shoppers.”
Retailers in Florida are expected to boost staffing by about 20 percent during the tax holiday weekend to accommodate shoppers. In general, retailers expect an average increase of between 30 and 40 percent in store traffic over the weekend because of the sales tax holiday.
McAllister said that retail spending in Florida remains strong, and he expected retail sales to at least match last year’s growth. A National Retail Federation survey predicts that families with school-aged children will spend an average of $634.78 on apparel, shoes, supplies and electronics in 2013, down from $688.62 last year.
“Back-to-school sales were up about 6 percent in Florida last year, and we are close to that pace right now,” McAllister said. “Because of the tax holiday, retail stores generally perform a little better in Florida than in states without a sales tax holiday.”
During the tax holiday weekend, there will be no state or local sales taxes due on personal computers and related accessories having a sales price of $750 or less, purchased for noncommercial home or personal use. The term “personal computer” includes any electronic book reader, laptop, desktop, handheld, tablet, or tower computer, but does not include cellphones, video game consoles, digital media receivers, or devices that are not primarily designed to process data. The term “related accessories” includes keyboards, mice, personal digital assistants, monitors (except those with TV tuners), modems, routers, and nonrecreational software.
As in previous tax holidays, clothing and shoes up to $75 will be tax exempt, along with school supplies up to $15. That includes pens, pencils, erasers, crayons, notebooks, notebook paper, legal pads, binders, lunch boxes, construction paper, markers, folders, poster board, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, computer disks, protractors, compasses, and calculators.
ECONOMIC IMPACT OF THE SALES TAX HOLIDAY
A study by The Washington Economics Group (WEG) that examined the impact of the back-to-school sales tax holiday confirmed that increased spending during the three-day period in 2010 generated $115 million more in taxable sales, and $293 million more in overall sales. That generated an additional $7 million in revenue to the state of Florida.
HISTORY OF THE SALES TAX HOLIDAY IN FLORIDA
The first sales tax holiday in Florida was enacted in 1998, and ran for seven days – from August 15-21. It applied to clothing and footwear valued at $50 or less. It was patterned on a sales-tax-free period first enacted in the state of New York. There have been 11 sales tax holidays in Florida in 1998, 1999, 2000, 2001, 2004, 2005, 2006, 2007, 2010, 2011 and 2012.
Florida’s sales tax holiday was expanded in 1999 to a nine-day holiday – spanning two weekends from July 31 to August 8 – and the value of tax-exempt clothing raised to $100. The holiday in 2000 was nearly identical. In 2001, school supplies with a selling price under $10 were exempted for the first time, while the clothing exemption was reduced to $50.
After a two-year hiatus, the nine-day holiday returned in 2004 and continued through 2007 with an exemption on clothing under $50 and school supplies under $10. In 2005, to encourage residents to stock up on emergency supplies, Florida added a Hurricane Preparedness Sales Tax Holiday, which continued through 2007.
When the sales tax holiday returned in 2010, it was a three-day holiday from August 13-15 with exemptions on clothing under $50 and school supplies under $10. The three-day tax holiday was repeated in 2011 from August 12-14, with increased exemptions of clothing up to $75 and school supplies up to $15. In 2012 it ran from August 3-5.
Below you will find the Florida Department of Revenue's Tax Information Publication sheets related to the Back to School Sales Tax Holiday.
John is the communications director, and manages internal and external communications for FRF.
This analysis also quantifies the impact of the sales tax holiday on gross and taxable sales. To this end, it compares sales figures collected by the Florida Department of Revenue for the year 2009 when there was not a holiday, and the year 2010 when the sales tax holiday took place.
To read the complete report, click here: view report.
To read the 2009 report, click here: view report.