Do consumers really save on upcoming Va., Md. sales tax holidays?

WASHINGTON — State sales tax holidays are around the corner. Virginia’s three-day tax holiday begins Aug. 5 and Maryland’s six-day tax-free period opens Aug. 14.

The sales tax holidays are perfectly timed for back-to-school shopping and Virginia’s holiday also exempts from the sales tax energy saving appliances and emergency preparedness merchandise.

While the holidays are popular with some consumers, not everyone thinks they’re a good idea.

“When it comes down to it, sales tax holidays are really a tax gimmick,” said Scott Drenkard, director of state projects for the nonpartisan group Tax Foundation.

Drenkard charges that the tax holidays don’t promote economic growth and simply shift the timing of purchases. He also says that some retailers actually raise prices during tax holidays.

“Oh absolutely, and it kind of makes sense economically. You’re looking at a period when there’s an intense, additional demand,” Drenkard said.

Maryland forsakes the 6 percent sales tax on clothing and footwear $100 or less per item in its August tax holiday. The state offers a February sales tax holiday on energy saving appliances.

Virginia’s August tax holiday is far more extensive, exempting from the state and local 6 percent sales taxes clothing, footwear, school and office supplies.

In addition, Virginia includes emergency preparedness items like batteries, gas powered chain saws, batteries and flashlights, and also energy saving appliances that carry the Energy Star label, including dishwashers, air conditioners and washing machines.

“This sales tax holiday will make items that help families prepare for the school year or for a potential emergency more affordable,” said Gov. Terry McAuliffe in a press release announcing this year’s tax holiday.

The Tax Foundation says its analysis of sales tax holidays in 17 states has found that rather than chasing a 6 percent tax savings, consumers might be wise to watch for retail clearance sales.

“Usually you’re seeing 10, 15, 30 percent off sales … you’re probably better off trying to look for clearances in particular businesses and do your shopping then,” Drenkard said.

Maryland Comptroller Peter Franchot plans a statewide tour of Maryland retail shops in the weeks ahead, promoting the state’s six-day sales tax holiday.

“It’s money saved [for consumers] and less money out of their pockets,” said Alan Brody, press secretary of the Maryland Comptroller.

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