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Catawba Professor Comments on Tax Weekend

August 06, 2010

Category: Business & Economics, Faculty


Source: Businesses Hope for Big Crowds This Weekend (Salisbury Post.com)

By Emily Ford
Many Salisbury businesses will extend hours and add staff this weekend in anticipation of North Carolina's sales tax holiday.

Back-to-school items like classroom supplies, clothes, sports equipment and computers will ring up without state and local sales taxes beginning at 12:01 a.m. Friday and ending at 11:59 p.m. Sunday.

"We are rocking ready," said George Barnett, manager of Office Depot. "We are expecting a good crowd."

Barnett has extended Office Depot's Sunday hours to 11 a.m. to 7 p.m., two hours longer than usual. While many customers will shop for notebooks and glue sticks, Barnett said he's counting on selling plenty of big ticket items, such as computers.

"It's a great time to get laptops and desktops without having to pay Uncle Sam," he said.

While the three-day tax exemption may change the timing of school supply purchases, it won't change the quantity.Slate

"I have never seen a study on this, but I doubt that a tax holiday induces consumers to spend much more on school supplies than they otherwise would do," Dr. Jamie Slate, acting dean of the Ketner School of Business at Catawba College. "You can only buy so much paper and pencils."

The tax savings, however, could compel some consumers to take the leap and invest in a new computer, printer or other pricey device.

"Some folks may be enticed to purchase a machine that they might not otherwise purchase because of the tax savings," Slate said.

People in the market for a new computer may have taken advantage of recession-buster deals. Computer companies have been offering a variety of specials for months that could mitigate sales this weekend, Slate said.

Downtown Salisbury will host the Summer Night Out from 5 to 9 p.m. in conjunction with the tax holiday.

Dave Loflin, owner of the Thread Shed downtown, said he expects a 25 percent increase in business over a normal weekend. Thread Shed is one of the largest school uniform providers in North Carolina.

"We really count on this in the fall," Loflin said.

It's the ninth year for the tax holiday.

"I'm optimistic," Loflin said. "If it's a repeat of years past, I am expecting a big crowd."

Thread Shed will have additional staff and extended hours, staying open until 8 p.m. Friday and adding Sunday hours of 1 to 5 p.m.

The tax holiday wasn't as successful last year for Magic Mart, but manager Deon Lester said he's hopeful that prominent displays of back-to-school supplies, uniforms and backpacks will help.

"Last year it was actually kind of weak, so I'm hoping this year will be better," Lester said. "We are very competitive in our pricing."

Magic Mart employees will work extra hours this weekend, he said.

The new owners of Creative Teaching Aids haven't participated in a tax-free weekend before, so they don't know what to expect. But based on a recent uptick in business, they have high hopes.

"We are expecting it to be very busy," co-owner Pam Honeycutt said.

Many teachers have come in since early July to browse, with plans to return and make purchases this weekend, Honeycutt said.

Creative Teaching Aids will open Saturday from 10 a.m. to 2 p.m. and Sunday from 1 to 5 p.m. for the tax holiday. Beginning Friday, the store will have extended hours of 10 a.m. to 5:30 p.m. on weekdays until school starts.

Back-to-school shopping can account for 15 percent of consumer spending in the second half of the year, according to the N.C. Retail Merchants Association.

According to the National Retail Federation, spending on children of high school age or younger is expected to increase by 10.5 percent during this year's tax-free weekend. The average family will spend $606 on clothes, shoes, supplies and electronics, compared to $548 during 2009's tax holiday.

Spending on college-aged students will stay about the same, dropping slightly from $618 last year to $616 in 2010, the National Retail Federation estimated.

North Carolina is one of 18 states that offer a tax-free weekend.