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Article published Jul 20, 2003
Making the most of sales tax holiday weekend

By CHRIS WINSTON
Business Editor
In two weeks, millions of people will head to malls, shopping centers and retailers to buy clothes, computers, books and other back-to-school gear at a discount.
South Carolina residents will be enjoying their fourth annual sales tax holiday weekend, a three-day stretch beginning Aug. 1 that allows customers to buy many items without paying the 5-percent state sales tax.
The S.C. Department of Revenue reports that South Carolinians are saving $3 million each year during the three-day sales tax holiday -- on tax-exempt sales of $60 million. It is the state's third-biggest shopping weekend, behind only Thanksgiving weekend and the weekend preceding Christmas.
Nearly a dozen states across the nation have embraced the idea of a sales tax-free weekend. Georgia and North Carolina, seeing the success of South Carolina's weekend and residents flocking across state lines to get a few pennies off each dollar, have both added sales tax holiday weekends.
Some politicians and leaders in the retail industry are pushing the idea of a national sales tax holiday.
Proponents of the weekend say it saves consumers money and helps out retailers -- even though it costs state governments millions in tax revenues each year.
But saving a few cents isn't always worth it.
Experts suggest many Americans are being suckered into paying too much money for items they don't need just because they are saving 5 percent from no sales taxes.
"Consumers need to be careful around tax holidays," said Richard Hawkins, associate professor of marketing and economics at the University of West Florida. Hawkins has studied sales tax holidays and co-authored, "Six Reasons to Hate Your sales tax holiday."
Here are some ways to make sure you're taking the best advantage of the upcoming sales tax holiday.
Price your sanity
Officials at retailers both small and large acknowledge that the traffic on a sales tax holiday weekend now rivals that of the Christmas shopping season.
Long lines, picked-over items and hard-to-find parking have become the norm.
The first question you need to ask yourself is: Is it worth it?
If you're planning to buy $500 worth of clothes and school supplies that means you're going to save $25 in sales tax.
Is the $25 worth all of the time and aggravation of heading to the mall or new Wal-Mart Supercenter?
Or would you rather clip some coupons instead or wait until items go on sale closer to the start of the school year?
Depending on how much you have to buy, you may decide to wait.
Plan ahead
The S.C. Department of Revenue reports that there have actually been slight increases in sales tax collections during August since the sales tax holiday began.
That means many people during the holiday weekend are buying items that are not tax-exempt.
"When people are going shopping, they are also buying items that are not tax-exempt," said Danny Brazell, assistant public affairs director for the revenue department. "It's psychological. The average family is saving only $10 or $15, but they see it as saving money."
Brazell said retailers have also been getting more in the act, doing more advertising and sales of their own for the weekend, which has also increased total sales for the three days.
The best way to get bang for your buck on the sales tax holiday is to start now. Planning ahead, of course, is always the key to making the best financial decisions with your money.
Take out a sheet of paper this weekend, and make a list of what your children need this school year.
Mark down every notebook, pen, pack of paper, pair of jeans and T-shirt and estimate how much each of them will cost.
That way, if you decide to venture out and shop on the sales tax holiday weekend, you'll only buy what you need -- and you will save a few dollars at the same time.
Shop around
The best way to save money during the sales tax holiday is to buy only the tax-exempt items you need at the best possible prices.
The easiest way to save the most money is if you're planning to buy a large ticket item, such as a computer. Buying a computer for several hundred, possibly thousands, of dollars, can save you as much as $100 on a $2,000 purchase.
Once you have your shopping list in hand, you can really start your homework.
Start shopping around for your items, looking at newspaper ads, television commercials and in-store promotions for your shopping needs.
Take down the lowest prices for the items you're shopping for.
With that information in hand, you can keep from paying too much over the sales tax holiday.
You may find items on sale between now and Aug. 1 that you can get for more than 5-percent off. Instead of waiting for the sales tax holiday, go ahead and pick them up for a better price.
At the very least, you will know the lowest price you can get the items for -- and you can tell whether the retailers' "sales" for the holidays are really good deals or not.
Hawkins, at the University of West Florida, said shoppers in his study only saved 80 percent of what they expected to save according to pre-tax holiday prices.
"Sometimes, the markdowns are a little bit less generous (over the weekend)," Hawkins said. "Sometimes, if you don't buy that item marked down 20 percent, it will be 30 percent the next weekend."
Hawkins suggested you go ahead and buy that bathing suit or men's suit, and save the sales tax. However, don't wear the items and keep the receipts. A couple of weeks later, see if the prices are any lower, and be prepared to take them back.
He said buying an item marked down 25 percent will usually save you more money than one marked down 15 percent with no sales tax.
"Sales tax rarely amounts to the difference," he said.
Chris Winston can be reached at 562-7267 or chris.winston@shj.com.