Tax holiday comes at a good time
The heat of July lets everyone know we are in the heart of summer. For most families, and certainly for the kids, fall seems a long way away. But the start of school is really just around the corner.
We start school pretty early now in Alabama. Most school systems schedule the beginning of classes by the second week in August, some even earlier. Already parents are looking at back-to-school shopping, taking stock of clothes and shoes to see if they fit, and looking at whether the backpack and lunchbox can survive another year. There is also a list of items now required by schools, from binders to computer flash drives that can store thousands of files but attach to a key chain.
Back-to-school shopping can be a heavy hit to a family’s finances, especially in these times of high gas prices. Every dollar counts, and there is something that every parent and citizen should take advantage of in a couple of weeks to lessen the strain on the household budget.
From August 1-3, Alabama will hold its third annual sales tax holiday. The Friday to Sunday period will give Alabama shoppers the opportunity to save the state sales tax on a whole host of items for back-to-school. The Alabama general sales tax of four percent will be suspended for those days, and a majority of local and county governments are participating in the tax holiday as well. Families can save up to 10 percent in sales tax on their back-to-school purchases.
A family outfitting their children and spending $500 (not an outrageous sum these days) will save up to $50, depending on where they live. The suspension of the sales tax is not on every consumer item. Every article of clothing less than $100 is exempt, including shoes, pants, shirts, coats and school uniforms, even diapers for the little ones are exempt during the holiday. All school supplies that are $50 or less are exempt from sales taxes. Supplies from calculators and crayons to pencils and pens including books are exempt as long as they are under $30.
Computers are the one big-ticket item that will be exempt during the holiday. A single purchase with a sales price of $750 or less will not be charged the tax. Software, printers, even handheld devices that are not cellular phones (sorry, kids) are exempt. The classroom is changing, and technology purchases are becoming as commonplace as buying spiral-bound notebooks.
The back-to-school sales tax holiday was passed by the Legislature in April 2006, and it has been a popular measure the past two years. It couldn’t come at a better time with family budgets being squeezed like they are now.
Some folks always ask why we can’t have a sales tax holiday forever and just abolish these taxes outright. All state sales taxes are earmarked for education. Every penny the state collects from the sales tax goes to fund classrooms and support our colleges and universities. The tax holiday makes only a small hit on school revenue, while it really helps families. Yet if we permanently cut sales taxes, our schools suffer. Our children will suffer.
But for a few days at the beginning of August the main thing children will suffer will be trying on what seems to be countless pairs of pants and shirts, standing by their parents as they go through aisle after aisle of back-to-school items.
And the one thing parents won’t have to suffer is paying an extra eight to 10 percent on everything their children need to start the year off right.