Fla. sales tax holiday begins Friday
Tax on computers exempted for the first time
Published: Wednesday, July 31, 2013 at 6:01 a.m.
Last Modified: Tuesday, July 30, 2013 at 8:37 p.m.
SALES TAX HOLIDAY
What: The annual 2013 Florida sales tax holiday.
When: 12:01 a.m. Friday through 11:59 p.m. Sunday.
Where: Retailers throughout Florida.
Information: Visit dor.myflorida.com/dor/tips/pdf/tip13a01-04.pdf.
Heading into another school year this month, Florida shoppers can take advantage of a three-day sales tax holiday this weekend that will allow them to buy clothing and school supplies and not pay the state's 6 percent sales tax.
For the first time, the Aug. 2-4 tax holiday also will exempt personal computers and related equipment up to $750 in value. Shoes, clothing and backpacks will be limited to $75 or less, while school supplies will be capped at $15 per purchase.
Not all school-related items are exempt. For instance, book sales will be taxed. However, as the result of a bill (SB 406) unanimously passed by the Legislature and signed into law by Gov. Rick Scott in May, consumers can make tax-free purchases of electronic book readers, laptops, desktop computers, tablets and other electronic devices if they are less than $750.
The exemption does not include smartphones, video game consoles, digital media receivers "or devices that are not primarily designed to process data," according to the Florida Department of Revenue.
Florida, which has had an annual sales tax holiday most years since 1998, is following more than a half-dozen other states, such as Georgia and North Carolina, in exempting low-cost computer sales this year.
Rick McAllister, president of the Florida Retailers Federation, which lobbied for the inclusion of computers in the annual sales tax holiday, said including the lower-cost computers that could be used by students "made sense" this year as the pricing for the products continues to become more competitive. "We think it's a great deal for families," McAllister said.
McAllister also said Florida's retailers believe the annual sales tax holiday provides a positive economic boost for the state.
"I think it's important for retailers. It's important for Florida families. It's important for the state," he said.
But sales tax holidays have their opponents, including the conservative-leaning Tax Foundation, which criticized the national use of the tax breaks by the states in a report last year.
"Despite their political popularity, sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent and economically beneficial tax reform," the report said. "Sales tax holidays introduce unjustifiable government distortions into the economy without providing any significant boost to the economy."
McAllister called those arguments are a "myth," saying the Florida retailers have reported an increase in sales leading up to the tax holiday and higher sales during the holiday period, including taxable items that can offset the loss of revenue from the tax-exempt sales.
"It seems to stimulate sales," McAllister said.
"It's a very welcome stimulus for retailers," he said.
State economists estimate this year's three-day holiday could result in a loss of $34.7 million in sales tax revenue, split between $28.3 million in state collections and $6.4 million for the local governments that impose optional sales taxes.
The retailers point to several studies that bolster their argument about an increase in overall sales, including a review of the 2010 sales tax holiday in Florida by The Washington Economics Group.
The study found the holiday generated $115 million more in taxable sales compared with the same period in the previous year, with overall sales projections for the month exceeding the original estimate by $289 million.
The study found the state collected $7 million in taxes from those sales than what would have occurred without the holiday.
"It's a win-win," McAllister said.
Lloyd Dunkelberger is a writer in the Tallahassee Bureau.