For Immediate Release: March 8, 2016
CONTACT: James Miller This email address is being protected from spambots. You need JavaScript enabled to view it., (850)701-3015

Suni

Spending expected to be down slightly, but will still amount to $4.4 billion nationwide; 28 percent to purchase clothing and accessories, and 22 percent plan to decorate their office or home

TALLAHASSEE, FL – The Florida Retail Federation (FRF), the state’s premier trade association representing retailers for over 75 years, announced today that spending for St. Patrick’s Day is expected to be $35.37 per person this year, down slightly from last year’s $36.52. Total spending nationally for the March 17 holiday is expected to reach $4.4 billion based on U.S. population 18 and older.

“Florida retailers can expect to see a nice bump in their sales in the coming weeks as millions of Floridians purchase food, clothing and decorations to celebrate this festive day with friends and family,” said FRF President/CEO Randy Miller. “Springtime in the Sunshine State always puts people in a good mood, and St. Patrick’s Day is coming along at the right time for both consumers and retailers.”

According to the FRF’s national partners at the National Retail Federation, who coordinated the St. Patrick’s Day Spending Survey conducted by Prosper Insight and Analytics, fans of St. Patrick’s Day plan to celebrate in a number of ways. According to the survey, 82 percent will wear green to show their Irish pride, 31 percent plan to make a special dinner, 29 percent will head to a party at a bar or restaurant and 21 percent will attend a private party. In addition, 23 percent plan to decorate their homes or offices in an Irish theme.

According to the survey, 57 percent of those celebrating will purchase food and beverages, 28 percent will buy apparel or accessories, 23 percent will buy decorations and 17 percent will buy candy. The survey asked for the first time where consumers will make their St. Patrick’s Day purchases. More than a third, 36 percent, plan to do so at a grocery store, 30 percent at discount stores and 20.8 percent at bars and restaurants.

The holiday is most popular among individuals 18-24 years old with 70 percent celebrating but those 25-34 years old will be the biggest spenders at an average $42.58.

ABOUT THE FLORIDA RETAIL FEDERATION Founded in 1937, the Florida Retail Federation is the statewide trade association representing retailers -- the businesses that sell directly to consumers. Florida retailers provide three out of every four jobs in the state, pay more than $49 billion in wages annually, and collect and remit more than $20 billion in sales taxes for Florida’s government each year. In fact, more than three out of four of Florida’s budget dollars come from retail-related activity.

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A Response to the Tax Foundation’s Special Report on Sales Tax Holidays (No. 201, July 2012)
November, 2012
_____________________________________________________________________________
The Tax Foundation is a Washington, D.C.-based think tank founded by a group of business executives in 1937 in response to the growth of federal spending under President Roosevelt.  Its funders have included Exxon Mobil, the Koch Family Foundation, the Earhart Foundation and Citizens for a Sound Economy.
The Tax Foundation is generally critical of tax increases, high business taxes, "sin" taxes, tax preferences for the housing industry, and use of the tax code for "picking winners and losers.   The Tax Foundation has attacked sales tax holiday legislation in a “special report” issued annually since at least 2006.
The report presents no original research.  Many of its “findings” on sales tax holidays are presented as fact without citation or based on a misinterpretation of the literature.
1.  The Tax Foundation asserts that retailers raise prices during a sales tax holiday.  This conclusion is not supported by the studies they cite.
A.        The 2003 Florida study on which the Foundation chiefly relies does not conclude that retailers raised prices on covered items during the holiday.  Instead, it found that covered items were not as inexpensive as the authors had predicted.  This “could indicate the use of less-generous markdowns by Florida retailers”, the study found, or it could mean that “the holiday was scheduled during an intrinsically high-price period.”  In any event, the study concluded that at least 80% of the benefit of the holiday went to consumers rather than retailers.  The researchers urged more investigation.  
B.        The 2009 Michigan study also relied on by the Foundation does not conclude that retailers generally raise prices during a sales tax holiday.  Instead, it found that pre-tax prices on computers were lower, on the whole, during the sales tax holiday than before it, although the pre-tax price of lower-end laptops was slightly higher during the holiday than before it.  The author noted that the economic model he used produced “an ambiguous prediction about the direction pre-tax prices will change.  The increased competition retailers face due to greater foot-traffic in their stores during sales tax holidays serves to temper their desire to increase pre-tax prices.”
2.         The Tax Foundation argues that holidays shift the timing of purchases that would have been made anyway.  This conclusion is (a) overstated for items that are tax-exempt during the sales tax holiday, and (b) not supported by the studies they cite for items that remain taxable.
A.        The Foundation claims that sales tax holidays “simply shift the timing of sales” rather than stimulate new sales.   The 2009 Michigan study found that the timing response accounted for between 37 and 90 percent of the increase in sales of exempt computers during the holiday.   This means that between 10 and 63 percent of these sales were new and not time-shifted.  At any rate, it is no surprise that savvy shoppers will time their purchases (especially of major items) to periods when they know there will be no sales tax added.
B.        The more important question is whether these same shoppers, when they are in the marketplace to benefit from a sales tax holiday, will purchase items that are not exempt from the sales tax.  On this point the Tax Foundation cites no authority save its own assertion that any such “impulse” purchases likewise would be shifted from other time periods.
C.        On the other hand, a 2007 Texas study found that shoppers viewed the holiday as an important reason to go shopping. The study cites a Wall Street Journal article in which New York University’s Stern School of Business Professor Peter Golder observes that consumers respond to sales tax holidays because they become “a social thing and community activity, something to talk about at work, with friends and family”.
D.        Other economists call this the “Bandwagon Effect” of consumer demand.  Whatever its called, consumers and retailers like the holiday:  “Mention the words ‘sales tax holiday’ and consumers fall into a shopping frenzy.  It’s not as if a break on sales taxes –usually only 4% to 7% of purchases – really amounts to any great savings.  But shoppers still go crazy for the deals because many retailers offer additional discounts, making it worth their while.”
E.         For many retailers, the back to school sales tax holiday is one of the most important sales weekends of the year – behind only the weekend before Christmas and the day after Thanksgiving.  They promote it aggressively with advertising and markdowns.
3.  The Fax Foundation argues that lowering taxes will stimulate economic growth but ignores this effect in the context of sales tax holidays.
A.        Economists and fiscal note writers have long debated static vs. dynamic modeling and how to quantify the effects of tax policies.  Some economists calculate economic effects using an input-output methodology. Some use a time series forecast.  Fiscal note writers estimate only direct impacts – they exclude secondary impacts from their estimates.
B.        The Tax Foundation is a proponent of economic modeling in some contexts.  In its October, 2012 analysis of Presidential candidate Mitt Romney’s tax plan the Foundation argued that “while economists disagree about the degree to which taxes affect behavior, they will all admit that zero effect is not realistic.”   The Foundation then applied “an actual set of tax and economic data . . . to produce a picture of the likely effects [of the] Romney tax plan.”
C.        Based on its econometric modeling, the Foundation found that that at least “60% of the “static revenue loss from Romney’s plan is recovered when the dynamic effects of economic growth are taken into account.”   This result, it noted, was fully consistent with the results of the Kennedy tax cuts phased in between 1962 and 1965.
D.        Neither the Foundation nor the studies it cites in its report makes any attempt to model the dynamic economic effects of sales tax holidays.  All point to the static effect - taxes will not be collected on purchases that are tax exempt during the holiday – but there is no attempt to measure the indirect dynamic effects, even though a zero indirect effect is, as the Foundation argues, not realistic. 


Endnotes:


http://taxfoundation.org

See e.g., “Sales Tax Holidays:  Politically Expedient but Poor Tax Policy”, the Tax Foundation Special Report #201, July 2012.

Richard Harper, et al., “Price Effects Around a Sales Tax Holiday:  An Exploratory Study,” Public Budgeting & Finance 23 (Winter 2003)

Cole, Adam J. (2009a). “Christmas in August: Prices and Quantities During Sales Tax Holidays.” In Sales Tax Holidays: Timing Behavior and Tax Incidence,  Ph.D dissertation, University of Michigan.

Id. 

Supra, note 2, p. 1.

Id., p. 74

Supra., note 2, p. 6.  .

Mogab, John W. and Michael J. Pisani (2007). “Shoppers' Perceptions of the State Sales Tax Holiday: A Case Study from Texas.” American Journal of Business 22 (2): 45-56.

Id.

“. . .the extent to which the demand for a commodity is increased due to the fact that others are also consuming the same commodity. It represents the desire of people to purchase a commodity in order to get into ‘the swim of things’; in order to conform with the people they wish to be associated with; in order to be fashionable or stylish; or, in order to appear to be ‘one of the boys.’”  H. Leibenstein, “Bandwagon, Snob, and Veblen Effects in the Theory of Consumers’ Demand,” The Quarterly Journal of Economics (May 1950), reprinted in W. Breit and H.M. Hochman, Readings in Microeconomics, Second Edition (New York: Holt, Rinehart and Winston, Inc., 1971), pp. 115-116.

Degross, R., “Shoppers Take a Break from Sales Tax,” Shopping Center World, Vol. 31 (5), 2002, 32-33.

Id.  See also, Ann Zimmerman, “Retailers Want In on Stimulus Plan,” Wall Street Journal (Dec. 24, 2008). 

http://www.bea.gov/papers/pdf/WB_IOMIA_RIMSII_020612.pdf

“Simulating the Economic Effects of Romney’s Tax Plan”, the Tax Foundation Fiscal Fact  #330, October 3, 2012.

Id., p. 2

Id.

Tuesday, 01 March 2016 14:58

Save Our Sales Tax Holidays

Written by

FRF URGES PASSAGE OF ALL SALES TAX HOLIDAYS

The Back-to-School, Disaster Preparedness and Energy Star sales tax holidays provide meaningful tax relief for Florida families; Senate amendment was filed stripping ALL sales tax holidays

TALLAHASSEE, FL – The Florida Retail Federation (FRF), the state’s premier trade association representing retailers for over 75 years, encouraged the House and Senate to include the sales tax holidays in their final tax proposal, providing millions of Florida families with tax relief. Consumers rely on these sales tax holidays to provide for everything from shopping for school supplies to computers to buying supplies to prepare for a disaster. There’s currently a Senate strike all amendment which removed all sales tax holidays from the House tax package, HB 7099. The Senate was slated to hear this strike all amendment today but temporarily postponed the bill.

“For almost 20 years, Florida families have relied on these sales tax holidays as a way to provide for and protect their loved ones, and we’re concerned that removing them from the House tax package means consumers won’t be able to experience this important tax relief,” said FRF President/CEO Randy Miller. “If the Senate ultimately decides to keep these holidays out of the House bill, then we encourage them to pass the individual bills for these important sales tax holidays including Back-to-School, Disaster Preparedness and Energy Star.”

The Senate does currently have the Back-to-School (SB 198), Disaster Preparedness (SB 608) and Energy-Star (SB 870) sales tax holidays as standalone bills, but has not agendad these bills in their final committee stop – Appropriations.

The back-to-school sales tax holiday in particular has been the most popular holiday among both consumers and retailers. This holiday has been providing Florida shoppers with vital tax relief since 1998. Florida has experienced a back-to-school sales tax holiday every year since 2010, and the holiday has been a staple of Florida’s economy in 14 of its 18 years of existence.

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 generated $115 million more in taxable sales, and $293 million more in overall sales.

That economic boost leads to higher payrolls in the retail industry. Retailers say they typically boost staffing by about 20 percent during the tax holiday weekend to accommodate shoppers. In general, retailers say they get an average increase of between 30 and 40 percent in store traffic over the weekend because of the sales tax holiday.

ABOUT THE FLORIDA RETAIL FEDERATION
Founded in 1937, the Florida Retail Federation is the statewide trade association representing retailers -- the businesses that sell directly to consumers. Florida retailers provide three out of every four jobs in the state, pay more than $49 billion in wages annually, and collect and remit more than $20 billion in sales taxes for Florida’s government each year. In fact, more than three out of four of Florida’s budget dollars come from retail-related activity.

For Immediate Release: February 22, 2016
CONTACT: James Miller This email address is being protected from spambots. You need JavaScript enabled to view it., (850) 701-3015

TALLAHASSEE, FL – The Florida Retail Federation (FRF), the state’s premier trade association representing retailers for over 75 years, is now accepting nominations for its prestigious Florida Retailer of the Year award, which recognizes an outstanding retailer for sound business practices, and a commitment to their employees, customers and communities. Nominations must be submitted by Friday, March 25.

“Florida’s retail industry plays such an important role in the success of our state, and we are excited to shine the spotlight on those retailers who contribute to that success while also supporting their local community,” said FRF President/CEO Randy Miller. “We ask consumers of these retailers to support their favorite businesses by nominating them for this prestigious award.”

Eligible businesses are those with sales volume of $5 million or less and have a physical presence in the operation and/or management of the retail business. People interested in nominating a retailer may nominate more than one, self-nominations are allowed and the business does not have to be an FRF member. Nominations can be submitted online by filing out this form or by completing this PDF nomination form and email to This email address is being protected from spambots. You need JavaScript enabled to view it. or mailed to 227 S. Adams St., Tallahassee, FL 32301.

The business selected as Retailer of the Year will be recognized before a statewide audience during the Retail Smarter Symposium June 8 at the Vinoy Renaissance Resort & Golf Club in St. Petersburg. The Florida Retailer of the Year award was started in 1999, and was awarded last year to Jon & Betsy Hughes of the Track Shack in Orlando.

ABOUT THE FLORIDA RETAIL FEDERATION
Founded in 1937, the Florida Retail Federation is the statewide trade association representing retailers -- the businesses that sell directly to consumers. Florida retailers provide three out of every four jobs in the state, pay more than $49 billion in wages annually, and collect and remit more than $20 billion in sales taxes for Florida’s government each year. In fact, more than three out of four of Florida’s budget dollars come from retail-related activity. For more information, visit the FRF website, and follow FRF on Facebook and Twitter.

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