Sales tax holiday a win-win for retailers, shoppers, merchandising professor says

Thursday, July 27, 2006
Category:

From Friday, Aug. 4 through Sunday, Aug. 6, shoppers in Texas will not pay sales tax on most clothing and footwear priced under $100, including items put on layaway, during the state's annual sales tax holiday. Texas Comptroller and gubernatorial candidate Carole Keeton Strayhorn has predicted that shoppers will save $49 million in sales taxes over the weekend, including $38.5 million in state sales tax and $10.5 million in local sales taxes.

A professor in the University of North Texas School of Merchandising and Hospitality Management says that over the past eight years, the first weekend of August has become "Christmas in August" for retailers, who plan for increased traffic and sales.

"Retailers are offering incentives, similar to those found during the Christmas season, to lure shoppers into stores, such as fashion shows and drawings for gift certificates. Regardless of the season, consumers want an exciting shopping experience and expect to be entertained," she says.

However, "while it's reasonable to assume consumers are receiving a bargain" by not paying sales tax, Crutsinger says those who will save the most money are the "savvy shoppers" who have a list of items they wish to buy and have researched the stores that have the lowest prices.

Furthermore, "many shoppers may use the holiday to buy items that they don't need. The holiday may give them a false sense that they are saving money," she says.

"Time-impoverished shoppers" may avoid going into stores during the tax-free weekend, Crutsinger says.

"For them, the shopping costs, such as time spent driving to stores and waiting in lines, may not outweigh the tax-free breaks," she says.

UNT News Service Phone Number: (940) 565-2108