The 2012 version officially got under way several hours ago at 12:01 a.m today (Friday), but the blue-light special on area retail floors continues through 11:59 p.m. Sunday.
For the few who might be unfamiliar with this opportunity to save 10 percent on back-to-school related purchases — clothing, school supplies, art supplies and computers — we refer to the seventh annual Sales Tax Holiday whose origin can be traced to 2006 when state legislators approved Tennessee Code Annotated 67-6-393 establishing the state’s first tax holiday in which purchases on certain items were exempted from local and state sales tax.
In return, state lawmakers agreed to reimburse local jurisdictions for money they lost from the local sales tax exemption for the three days of shopping. It was a concept designed to save Tennessee taxpayers a little money on the weekend before the reopening of most schools and it was put into place provided state government leaders felt comfortable with including it in the budget.
The first such three-day holiday from local and state sales taxes was observed Aug. 4-6, 2006, and the annual no-tax celebration has shown no sign of weakening. Even in tough times for state government budgets, Nashville lawmakers have made every effort to keep the Sales Tax Holiday intact, even as other states have cancelled, or discussed cancelling, their holidays. State leaders like the idea because it is a unique — and politically friendly — method of helping Tennessee residents keep some of their own money in their pockets.
Here’s how it works. Bradley County residents pay 9.75 percent on retail purchases. During the Sales Tax Holiday, this levy is lifted on all eligible items. These tax-free products include clothing with a price of $100 or less per item, school and school art supplies of $100 or less per item, and computers with a price of $1,500 or less.
Specifically, the list below shows what is eligible for the sales tax exemption for the entire three-day weekend:
1. Clothing: Shirts, dresses, pants, coats, gloves and mittens, hats and caps, hosiery, neckties, belts, sneakers, shoes, uniforms (athletic and nonathletic) and scarves.
2. School Supplies: Binders, book bags, calculators, tape, chalk, crayons, erasers, folders, glue, pens, pencils, lunch boxes, notebooks, paper, rulers and scissors.
3. Art Supplies: Clay and glazes, acrylic, tempera and oil paints, paint brushes for art work, sketch and drawing pads, and water colors.
4. Computers: Central processing units (CPU), along with various other components including monitor, keyboard, mouse, cables to connect components and pre-loaded software. (iPads are eligible for tax exemption, but video games and consoles are not).
The Tennessee Department of Revenue reports shoppers in the state saved an estimated $15 million during the inaugural observation of the holiday. Since the first year, the savings have ranged from $8 million to $10 million.
It’s good business for retailers because it brings shoppers, and their money, into their stores; some might call it the Black Friday of back-to-school, and the best news is the black extends into Saturday and Sunday.
It’s good business for household budgets because parents can take care of the kids’ back-to-school needs while saving about 10 percent in the mix.
It’s good business for average consumers because everyone saves some cash, not just the kids and their parents; general shoppers benefit from the same sales tax exemption on eligible items regardless of age, income or educational circumstance.
It’s good business for Tennessee because residents in neighboring states often slip across the border in order to reap the tax-free benefit; and Tennessee shoppers are extended the same courtesy when other states have their tax-free holidays.
Buying is believing.
And besides, a 10 percent savings is better than no savings at all.
Use the Sales Tax Holiday, but practice moderation. Don’t buy just for the savings. Buy for the need.