Missing Georgia Sales-Tax Holiday A Loss For Small Businesses

ATLANTA, GA — In Georgia, this weekend will come and go without a sales-tax holiday — a late July break on clothing, computers and school supplies that had become something of an annual tradition in the state.

For retailers, especially small, independently owned stores, that news is as bad, if not worse than, it is for Peach State consumers.

“It’s disappointing, because it definitely does help all the small businesses in all areas,” said Steve Warres, owner of Once Upon A Child, a children’s clothing shop at Market Place in Cumming. “I don’t know if people really save a lot of money, but it brings that excitement out for everybody.”

The Georgia legislature, which has to approve the tax holidays on a yearly basis, didn’t do so for 2017. First enacted in 2002, the holiday that fell in the back-to-school days of late July waived state sales taxes on clothing, school supplies, computers and computer accessories. A second sales tax holiday in the fall highlighted energy-efficient appliances.

The General Assembly’s inaction came on the heels of arguments that the holidays don’t do enough to stimulate the economy to offset the hit the state budget takes from them.

Wesley Tharpe, of the Georgia Budget & Policy Institute, has estimated that the holidays cost state and local governments as much as $70 million in tax revenues.

“That adds up to real money at a time when Georgia’s state and local lawmakers are struggling to fully fund schools, meet transportation demand and keep rural hospitals from shuttering,” Tharpe wrote. “Redirecting the funds Georgia loses through its sales tax holidays to these and other public investments could provide real benefit to Georgia families and a real boost to the state’s economy.”

Upcoming sales-tax holidays in states bordering Georgia:

  • Alabama (Aug. 4-6)
  • Florida (Aug. 4-6)
  • South Carolina (Aug. 4-6)
  • Tennessee (July 28-30)

Supporters, including the Metro Atlanta Chamber, argue that the holidays do, in fact, encourage more consumer spending and keep money in the state, instead of encouraging Georgians to head across state lines to take advantage of similar deals in neighboring states.

“I understand the government needs to make their $70 million they lose from it, but it definitely hurts the small business person,” Warres said.

Peter Nguyen, general manager of HL Computer Sales & Service in Lawrenceville, agrees.

“We’re expecting to lose revenue there,” said Nguyen. “Every time of year (the sales tax holiday) happened, we’ve always had people coming out … . We had a good amount of customers who would wait until that time to come get a system from us.

“If folks can save a buck or two, they’ll come in and, with a small business, you want to do whatever business you can. It’s hurt a little bit. You have to find other ways to fill up the hole.”

Both Warres and Nguyen say they hope the legislature will consider reinstating the sales-tax holiday in the future. Until then, Warres says his shop is taking it upon itself to make this weekend special for shoppers — offering discounts of 30-90 percent on merchandise.

“Who listens to the government anyway?” he said, laughing. “We’ll just do our own.”

Photo via Shutterstock

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Originally published July 28, 2017.

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