Sales tax holiday underway; what you need to know

Sales tax holiday underway; what you need to know

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by ANDREW DUNN / The Charlotte Observer

WCNC.com

Posted on August 3, 2012 at 5:04 AM

Updated Friday, Aug 3 at 6:21 AM

Love them or hate them, North and South Carolina’s sales tax holidays began at 12:01 a.m. Friday, kicking off a three-day shopping extravaganza that has come to resemble a summertime Black Friday.

The Carolinas are among at least 17 states to offer a weekend of tax-free shopping, most of them timed to coincide with the all-important back-to-school season.

Second only to the Christmas shopping season, the tax-free weekend is a boon to shopkeepers, turning an otherwise slow summer weekend into a traffic-snarling event at shopping centers and malls.

“It’s the one weekend of the year we’re on a level playing field with the online merchants who have a sales tax holiday every day of the year,” said Andy Ellen, the president and general counsel of the N.C. Retail Merchants Association.

North Carolina will lose about $13.6 million in sales tax revenue over the three days, according to state Department of Revenue estimates. Or you could view it as a $13.6 million savings to consumers.

Tax savings will vary by area, because most counties impose taxes on top of the state’s 4.75 percent sales tax. The total sales tax is 6.75 percent in Union, Gaston, Lincoln and Iredell counties, 7 percent in Cabarrus and 7.25 in Mecklenburg.

A consumer who buys a $1,000 laptop in the Charlotte area will save roughly $70 in sales tax.

Instead of pocketing the savings, Ellen said, consumers are likely to spend the extra cash on an additional purchase or treat for the family.

“I may take my kid to the movies, which I may not have done otherwise,” he said.

Even in tough economic times, state legislators have kept the tax holiday in place.

“It started back in 2002, and people have come to expect it,” said Beth Stevenson, a spokeswoman for the N.C. Department of Revenue.

According to the National Retail Federation, a parent with children in kindergarten through 12th grade will spend $688.62 on back-to-school purchases, up from last year’s $603.63.

If all of those purchases were to fall into the tax-free category, that’s $46.48 in savings.

But before you decide to brave the crowds for a bargain, here are a few tips to maximize your savings and minimize the potential headaches:

Use your smartphone: Scanning apps such as Red Laser allow you to check for the lowest price on merchandise at bricks-and-mortar and online stores. This will save you time and money – not to mention gasoline.

Price match: Some retailers, including Walmart and Target, will match competitors’ advertised prices, saving you time, aggravation and gasoline.

Sunday means new sales: If you don’t find what you’re looking for on Friday and Saturday, be sure to check the new circulars on Sunday. There will be a whole new round of sales.

Bonus sales: Stores that don’t sell items eligible for the back-to-school tax break will often create their own sales. Furniture and tire retailers typically offer to pay the sales tax for customers to drive traffic to their stores.

Do your homework: Study the circulars to identify the best deals before you head out the door.

Don’t forget your coupons: Once you’ve studied up on the deals, be sure to clip or print any coupons you find. Be sure to check deal sites such as couponsherpa.com, retailmenot.com and couponcabin.com. If you have a smartphone, download coupon apps and save yourself the time and trouble of printing coupons.

Take inventory: Check your kids’ closets, the bottoms of their backpacks and any hand-me-downs you have in storage. You’ll likely be surprised how much you already have on hand. If the backpack is still in good shape, why buy new?

Know the rules: Be certain the items you’re buying qualify as tax-free. In North Carolina, clothing items can’t be more than $100, but you can use store coupons on a more expensive item to get the tax exemption. For example, a $125 dress will qualify if you have a 25-percent off coupon.

Make a list: Cross things off as you go. Be sure to take the kids’ school supply lists with you.

Set a budget: Don’t get caught up in the hoopla and spend more than you planned.

Shop clearance: Shorts and other summer clothing are on clearance right now, which is what the kids will be wearing to school for the next several months anyway.

Shop consignment and thrift stores: Buying used always saves money. Subtract the tax, and the savings are that much sweeter. And yes, even Goodwill participates in the tax holiday.

Buy quality: You’ll have less to purchase next year.

Splurge on a baby sitter
: If you have young children, this will be money well spent. The crowds will likely be horrendous. This will also save you money on purchases made to pacify the kids.

Shop early or late: Early Friday morning and Sunday evening are likely to be the least crowded times to shop. Avoid Saturday at the big-box stores, if at all possible.

Bigger is better: Big-ticket items like computers will save you the most money. Shoes, sporting equipment and clothes are other items with larger savings potential.

Never pay full price: A 6.75 or 7 percent discount is not much of a savings by itself so keep your eye out for merchandise that is already discounted to compound your savings.

Pre-order: Many stores, including college campus bookstores, allow you to make your selections in advance and arrange to have the order processed during the three-day weekend.

Check your receipt: Before you leave the store, make sure you got your tax break. If not, request a refund right then and there. North Carolina cannot issue you a tax refund.

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