Sales steady despite lack of tax-free holiday

MOREHEAD CITY — Although North Carolina no longer participates in the sales tax holiday weekend, area retailers say they have not been hurt in its absence.

Johnny Peterson, store manager at Staples, said the former three days without sales tax produced “tremendous” sales, but now consumers are spreading their back-to-school shopping over a longer period, rather than fitting it all in at once.

During the first weekend of August from 2002-13, the state held a sales tax holiday weekend, which purged the 6.75 sales tax on electronics and computers, sports gear, shoes, clothing and other back-to-school supplies. This is the second year the state has gone without a sales tax holiday weekend.

Mr. Peterson said Staples started to reduce prices on its back-to-school items effective July 1, and sales have not dipped since the N.C. General Assembly eliminated the sales tax holiday weekend after 2013.

“It seems like the shoppers do not do the big influx (of shopping all at once),” he said. “It is not the three big days, but probably spread out over three or four weeks now.”

Mike Wagoner, president of the County Chamber of Commerce, said so far he has not heard any negative comments concerning sales without the sales tax holiday weekend, but the Chamber is still hopeful the General Assembly will reinstate it in 2016.

Mr. Wagoner said getting the sales tax holiday reinstated is on the Chamber’s legislative agenda.

“The Carteret County Chamber supports the position of the North Carolina Retail Merchants Association to reinstate the sales tax holidays on the first weekend of August,” according to a Chamber statement. “Between 2012-13, consumers looked forward to three full days of tax-free shopping for selected items, including school supplies and clothing. Local merchants successfully leveraged the sales tax holidays to increase sales and profits. Let’s restore this popular shopping activity to stimulate local economies.”

Mr. Wagoner noted the sales tax holiday was pulled because it was estimated it cost the state $13 million in lost tax revenue in 2013.

However, he believes that is the wrong way to approach the shopping holiday. “Another way to look at it is that consumers actually saved $13 million,” said Mr. Wagoner. “Our legislators need to look at it from our perspective – what’s good for business is good for the state’s economy.”

Two bills were introduced in the General Assembly this year that would have restored the sales tax holidays, but never moved forward.

“We will keep trying,” said Mr. Wagoner. “Obviously, tax-free shopping season benefited local families and stores.”

He said the county is missing sales from tourists who would stay here during the first weekend of August and do their back-to-school shopping to avoid sales taxes.

According to the National Retail Federation, families are expected to spend less on back-to-school shopping this year compared to last year, when spending in this category jumped.

The average family with children between kindergarten and 12th grade is expected to spend $360.36 on school needs, down from $669.28 last year, according to a study conducted by Prosper Insights & Analytics for the NRF.

“As seen over the last 13 years, spending on back to school has consistently fluctuated based on children’s needs each year and it’s unlikely most families would need to restock and replenish apparel, electronics and supplies every year,” said National Retail Federation President and CEO Matthew Shay. “Parents this summer will inventory their children’s school supplies and decide what is needed and what can be reused, which just makes good budgeting sense for families with growing children.”

The Chamber and the N.C. Retail Merchants Association are looking for feedback from area retailers about store traffic on Aug. 7-9 with the absence of the sales tax holiday weekend.

Comments can be sent to Mr. Wagoner at mike@nccoastchamber.com or to Elizabeth Robinson at the NCRMA at elizabethr@ncrma.org.

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