Posted on Sun, Jul. 16, 2006

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This November, take a tax break

S.C. adds sales tax holiday after Thanksgiving

NICHOLE MONROE BELL

nbell@charlotteobserver.com

S.C. shoppers who relish the savings they get during the annual August sales tax holiday have an even sweeter deal coming this November: On what has traditionally been the busiest shopping weekend of the year, everything will be exempt from the 5 percent state sales tax.

Lawmakers threw in the tax break as part of larger property and sales tax changes passed last month. The one-time holiday, to be held the Friday and Saturday after Thanksgiving, means shoppers will have the chance to save on big-ticket items that normally don't qualify during the back-to-school sales tax holiday -- items such as televisions, jewelry and even cars.

"It sounds great," said Allison Hairr, administrative and marketing assistant for the Rock Hill Galleria. "The other sales tax holiday proved to be a great success for us, and I'm sure this one will be as much of a success too."

So what's the catch?

The Nov. 24-25 tax holiday ends after this year, and it comes just before a statewide 1 percent sales tax increase goes into effect in June 2007. Also, shoppers will still be required to pay local sales taxes, which in York and Lancaster counties are 1 percent. Legislators are raising the sales tax to 6 percent next year to make up for reducing property taxes on owner-occupied homes. The tax changes also include a reduction in the grocery sales tax from 5 percent to 3 percent.

South Carolina expects to lose $18 million in sales tax revenue this year to offer the holiday. That compares with about $2.6 million during the August holiday weekend, according to Danny Brazell, S.C. Department of Revenue spokesman. For lawmakers, the loss of revenue may be worth it if it takes some edge off any anger voters may feel toward the 2007 sales tax increase, Winthrop political science professor Scott Huffmon said.

"In October, just as they're realizing their sales taxes are about to go up soon and they're about to head to the polls, they'll be inundated with stores advertising the tax holiday," he said. "It's not that legislators think voters are gullible; they just don't want them focusing too much on the sales tax increase."