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Consumer
Sales tax holiday cushions back-to-school outlays
WASHINGTON (7/20/09)--The economy is putting a tight squeeze on back-to-school shoppers this year, confirmed a recent survey by Washington, D.C.-based National Retail Federation (NRF). One option for budget-conscious parents or students is to take advantage of some tax-free holidays in the coming weeks. According to the NRF's 2009 Back to School Consumer Intentions and Actions Survey, released July 14, the average family with K-12 learners will spend an average $548.72. That represents a decrease of 7.7% from $594.24 in 2008. The survey revealed that four of five Americans expect to cut back on back-to-school spending this year, 56.2% will search for sales, 59.6% will spend less overall, 41.7% will buy generic, and 40% will cut coupons. If you live in or near a state with a sales tax holiday, there’s another way to stretch your back-to-school dollar. On designated days in August--dates vary by state--shoppers can purchase school supplies, computers, and clothing exempt from state sales tax. (Local sales tax may still apply.) In a state with a 6% sales tax, a family spending $550 will see savings of $33--simply by shopping on the given holiday. Items must be priced below a maximum amount--$100 for clothes and shoes in many states, and between $20 and $100 for school supplies. Aside from the back-to-school sales tax holiday, some states hold sales tax holidays for other purchases, including Energy Star products, rifles and handguns, and hurricane-preparedness items. Visit taxadmin.org/fta/rate/sales_holiday.html for a list of all sales tax holiday dates, along with participating states and guidelines. Other ways you can budget for back-to-school supplies:
* Start now. Forty-four percent of those surveyed said they will start shopping three weeks to one month early to take advantage of retailers’ promotions and to space spending over time. * Or, wait until school is in session. Although only 2.5% of Americans said they plan to shop this way, there are savings to be had. After school begins, many retailers try to move merchandise using clearance prices. * Use leftover school supplies and replace only what’s not usable. Sharpen last year’s colored pencils. Tear used pages from an old notebook and it’s almost like new. * Compare prices and shop sales. Use newspaper ads, online promotion codes, and sales racks. * Shop at discount and outlet stores. They carry many name-brand clothes at off-brand prices. Three of four shoppers surveyed plan to visit discount stores. Also, you sometimes can find high-quality goods at second-hand stores or rummage sales. * Use the Internet to find special deals available only online. Also, sites such as eBay and Craigslist carry discounted books, clothing, computers and other electronics. * Swap or share items. Ask friends and neighbors to share or swap outgrown clothing or school supplies you no longer need.
For more information, listen to “Simplify Your Finances” in Home & Family Finance Resource Center.
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