Shoppers, retailers benefit from weeklong Md. sales tax holiday

August 14, 2011|By DAVE McMILLION |
  • Marcus Branch, 13, looks to his mother, Alyssa Branch, for approval on a T-shirt that he likes Sunday at Valley Mall in Halfway during the first day of Shop Maryland, a week when shoppers can avoid the state sales tax on certain items.
By Chris Tilley/Staff Photographer

When Mike Osborne heard about Maryland’s decision to drop its sales tax for a week to coincide with back-to-school shopping, he knew he would be visiting some stores.

“(It’s) one of the few breaks I’ll get on taxes in my lifetime, that’s for sure,” Osborne said as he shopped for clothes for his 17-year-old son in the crowded Aeropostale store at Valley Mall Sunday afternoon.

Shop Maryland, which began Sunday and continues through Saturday, allows shoppers to avoid the state’s 6 percent sales tax on apparel and footwear priced at $100 and less.

Maryland Comptroller Peter V.R. Franchot said earlier this month that the estimated tax-revenue loss from the program was $10 million, but he said the double-digit boost to retail sales outweighs the loss.

Maryland Retailers Association President Patrick Donoho said previously that retailers reported double-digit sales increases during the 2010 tax-free week, following a terrible 2009.

Maryland officials hope to lure out-of-state shoppers.

That was the case with Osborne, who just moved to Martinsburg, W.Va., from Roanoke, Va. The tax holiday was especially attractive to Osborne because he said he is “overtaxed now.”

The aisles in Aeropostale were filled with customers sorting through stacks of clothing looking for deals.

 “This is a good thing. Every little bit helps,” said Carla Carbaugh of Mercersburg, Pa., who was looking for clothes for her 10-year-old daughter in the store.

Besides the restriction of only being able to apply the tax exemption to items costing $100 or less, there are other rules, such as not being able to get the tax break on nonapparel items like jewelry, coffeepots or towels, said Mark Leadingham, sales manager for the J.C. Penney store in mall.

Although there is a price limit on each individual item purchased under the program, customers can buy thousands of dollars worth of merchandise, Leadingham said.

Leadingham said he was seeing a “definite spike in sales” Sunday in his store, although he did not have any sales numbers Sunday afternoon.

Tracey Wood of Hagerstown said she did not realize Shop Maryland was under way until she got to Valley Mall Sunday. When she realized the tax break was in effect, she snapped up four or five pairs of jeans to help get her son ready for school.

“He needs the clothes anyway,” Wood said.

Delmar Barrett of Martinsburg said he didn’t know about the tax holiday, either. Barrett, who was shopping in J.C. Penney, started buying merchandise after hearing other shoppers talking about the program.

Melissa Staup of Hagerstown was among those who had been planning for the tax break.

After getting a notice about Shop Maryland when she passed through a toll road in Baltimore, Staup was at the local mall Sunday looking for back-to-school clothes for her kids.

“We got a whole bunch of stuff,” said Staup, looking into a bag that contained four pairs of pants and eight tops for her daughter, and four tops for her son.

Tammy Weber of Sharpsburg said she has taken advantage of the tax holidays almost every year, and she planned to get all her shopping done for her son during the tax-free week.

Weber, who was shopping at J.C. Penney Sunday, said her son will be a 10th-grader at Boonsboro High School this year.

The state held similar tax holidays for a week in 2001, five days in 2006 and a week in 2010.

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