Amy Hemphill's son, a high school senior, needs new clothes for school.
"The tax holiday is after school starts," Hemphill said. "I'll let him get through a week, and get some things then."
For the first time since 2009, the back-to-school tax holiday has returned, albeit later in the summer, and for a shorter time period. Still, parents like Hemphill are delaying their shopping until Aug. 10 and 11, counting on the money they save from not paying taxes to lessen the costs of outfitting their kids.
Back-to-school is one of the year's busiest shopping seasons, second only to Christmas. The National Retail Federation said parents with school-aged children are expected to spend an average of $688.62 on clothes, electronics and supplies this year, up nearly $85 from last year's average. All told, shoppers spend nearly $84 billion getting their children ready for school, from kindergarten through college.
While the season is busy for retailers like Darryl Peck, whose PeachMac chain sells Apple computers and other devices, the addition of the tax holiday will make business boom. The back-to-school season, he said, is "way bigger" than Black Friday, and he expects compressing the tax holiday into two days will mean his stores will be even crazier than they are at the start of the traditional Christmas shopping season.
Peck said, the appeal is the savings on a new computer and the idea that shoppers are getting away with something by not paying taxes.
Jim Deffenbaugh isn't getting anyone ready for school, but he's held off on replacing his own electronics since the tax holiday lapsed. Now, the Atlanta resident is planning to get an iPad and a new laptop. He's told neighbors in his condo to wait to buy their own computers, as well.
"Just to save the tax is great," he said. "I was disappointed when they stopped it."
This year's back-to-school shopping season is going to be challenging for stores, said Marshal Cohen, chief retail analyst for NPD Group. Shoppers are more willing to wait until after school has begun to do their shopping, spreading it out over several months and several locations.
Cohen said the tax holiday is likely to get customers to shift the timing of their spending, and some shoppers will spend more on clothes or other items as they anticipate the savings elsewhere. A shopper who spent the $688.62 back-to-school shopping average would save about $48 by not paying taxes in counties where the state and local tax rate is 7 percent. Some stores will offer additional discounts to draw shoppers in, said John Fleming, a spokesman for the Georgia Retail Association.
That's the case at Discover Mills in Duluth, where mall manager Karl Woodard said he expects more people to take advantage of sales.
"It usually has a pretty big impact," he said.
Tax holidays began in Georgia in 2002 under Gov. Roy Barnes with a two-day back-to-school tax holiday and another earlier in the year, and evolved into a four-day late-summer holiday. The state's $2 billion budget deficit led the legislature to end the tax holiday after 2009, citing the need for the $12 million in revenue lost to the government. The tax holiday was reinstated this year by Gov. Nathan Deal, who said he wanted to offer people relief at the cash register. Legislators said Georgia was losing sales to neighboring states that kept their tax holidays.
Fleming said they are a stimulus to spending, providing an incentive for people to come out and shop. Chain stores that have locations in states with tax holidays and those without report they sell more in places where the holidays exist, he said.
"It draws people out to stores when they feel like they're getting a break," he said. "It's the psychology of sticking it to the government by not paying taxes. They buy extra, they might go out to a restaurant. Overall, sales rise."
The back-to-school rush is just starting at Sprong Children's Shoes in Buckhead, owner Stephanie Teichner said. She said when times are tight, people who might have come in to buy two or three pairs of shoes are instead getting one.
But Teichner is reminding shoppers of the tax-free weekend, hoping they'll use the savings as an incentive to buy another pair of shoes, or to come back in for accessories like tights.
"It'll be helpful no matter what," she said. "I'm glad the state decided to bring it back."
ABOUT THE TAX HOLIDAY
The tax holiday starts at 12:01 a.m. Aug. 10 and concludes at midnight Aug. 11. Clothing and footwear that cost less than $100 per item are exempt from tax, as are general school supplies that cost $20 or less per item. A single purchase of a computer or computer-related accessories that cost $1,000 or less is exempted from tax on the holiday.
Jewelry, purses, umbrellas, eyewear, watches and other accessories are not exempt, nor are sales of furniture or cellular devices. Sales in theme parks, restaurants or airports will be taxed.
For a complete list of tax-exempt and nonexempt items, visit https://etax.dor.ga.gov
SECOND TAX HOLIDAY:
A second tax holiday for energy and water-efficient products that cost $1,500 or less per item will be held Oct. 5-7.
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