Post by EagleDad on Aug 5, 2010 21:23:51 GMT -6
www.suburbanchicagonews.com/napervillesun/news/2559138,6_1_NA03_SALESTAX_S1-100803.article
August 3, 2010
By KATHY CICHON kcichon@stmedianetwork.com
If you keep meaning to tackle that lengthy shopping list of back to school supplies, this weekend is a good time to start.
Beginning Friday, Illinois is implementing a sales tax holiday on school supply and back to school clothing purchases. The holiday runs through Aug. 15.
"Families in Illinois will see a 5 percent discount on their receipt because we won't be collecting the state portion of the sales tax," said Susan Hofer, spokesperson for the Illinois Department of Revenue.
Consumers don't have to do anything special to receive the tax break -- it's calculated by the merchant. And anyone, whether in school or not, is eligible.
"Frankly, we don't have an age limit set," Hofer said.
So anyone can buy clothing or supplies on the list -- children, college students, parents, etc. -- and benefit from the tax holiday.
"If you need a ruler at home, that week would be a good week to get one," Hofer said.
While some states offer the holiday for a week or weekend, Illinois chose to have the holiday run for 10 day to cover two weekends, Hofer said.
"We sure hope that it's a busy week," said David Vite, president and CEO of the Illinois Retail Merchants Association.
IRMA, which represents more than 20,000 stores including independently owned and large chains, is estimating Illinois families will save at least $30 per family as a result of the tax holiday.
"Retailers are going to be having promotions on top of that," Vite said.
On July 7 the governor signed a bill allowing for a sales tax holiday on most required school supplies -- such as pens, pencils, paper, crayons, etc. -- as well as clothing and footwear priced under $100.
"This is an incentive of his to make sure families can afford to get their children to school with the supplies they need," Hofer said.
A detailed list of what is covered by the holiday and what is not can be found at www.revenue.state.il.us/SalesTaxHolidayList.pdf
"Clearly there are some difficult definitional issues," Vite said, citing the question of whether football shoes are covered. "In this instance, cleated sports shoes are not, but running shoes are."
The state posted an updated list of what is covered under the sales tax holiday after fielding questions about whether supplies for after-school sports and activities are covered.
"And they're not," Hofer said.
Big ticket items such as computers and computer equipment are also not covered by the holiday.
"Schools very rarely require children to have computers," Hofer said.
Hofer said shoppers should remember it is required supplies that children use at school and the type of clothing they would wear to school that are on the approved list.
"If parents and guardians keep those two things in mind, then they're probably covered by the sales tax holiday," Hofer said. "If the child needs to have it on the first day of school, then those items are probably covered."
The state is entering uncharted territory with the holiday. While Illinois has offered incentives for the purchase of high efficiency items such as appliances, it has never offered a sales tax holiday, Hofer said.
"The interesting thing is we've never done this before so we don't know how many people will be buying" something just because of the sales holiday and that's simply for back to school "so we'll be watching this very closely," Hofer said.
The state will not know how much revenue is lost from the sales tax holiday until the end of September, as retailers pay their August sales tax in September, she said.
Merchants are hoping the holiday translates to additional traffic and spending by consumers.
"One of the things we thought is perhaps that extra 5 percent (in savings) might be used to buy some of the things that are nice to have, but aren't required," Hofer said.
"If Florida is a barometer at all, we would expect that there would be close to $1 billion of extra activity in Illinois over the period of time," Vite said.
IRMA has cited a study of the Florida sales tax holiday by the Washington Economics Group, which showed the tax holiday has a positive economic impact, increasing gross sales by about 8 percent for the month in which it is held.
According to the WEG analysis, after eight years of tax holidays, Florida missed out on revenue when it didn't have the holiday in 2008 and 2009. If Florida had held a tax holiday in 2009, WEG said it would have represented an increase in economic activity of about $1.7 billion, boosting Florida's gross domestic product by close to $1 billion for the year. The tax holiday also would have resulted in a net increase of $118 million in state and local taxes as a result of increased economic activity.
The holiday, Vite said, is a positive for consumers, businesses and municipalities. Unlike tax holidays in some states, the local portion of the sales tax remains in place.
"All of those increased sales are going to generate more for local governments," Vite said.
Increased traffic at stores helps generate new jobs and overall sales tax revenues, he said.
The holiday also means that for the first time Illinois will be competitive with bordering states, he said. Iowa's tax holiday runs for two days this weekend. Missouri's lasts for three days. Wisconsin, Indiana and Kentucky don't have holidays.
"We hope to get a lot of across-the-border sales as well," Vite said.
18 states are having sales tax holidays, all of which have been successful, Vite said.
"So we have no doubt Illinois will be as well," he said.
The governor agreed to a one-year trial of the holiday, "but if we're successful we're sure hoping we'll be able to extend it year after year," Vite said.
All of the dollars of savings do end up in the pockets of consumers, he said.
"The road to recovery in these difficult economic times is going to go through retail," Vite said.
Seventy percent of the gross national product is through consumer spending, he said.
"The more we can move the needle upward, the better the economy is going to be," he said.
August 3, 2010
By KATHY CICHON kcichon@stmedianetwork.com
If you keep meaning to tackle that lengthy shopping list of back to school supplies, this weekend is a good time to start.
Beginning Friday, Illinois is implementing a sales tax holiday on school supply and back to school clothing purchases. The holiday runs through Aug. 15.
"Families in Illinois will see a 5 percent discount on their receipt because we won't be collecting the state portion of the sales tax," said Susan Hofer, spokesperson for the Illinois Department of Revenue.
Consumers don't have to do anything special to receive the tax break -- it's calculated by the merchant. And anyone, whether in school or not, is eligible.
"Frankly, we don't have an age limit set," Hofer said.
So anyone can buy clothing or supplies on the list -- children, college students, parents, etc. -- and benefit from the tax holiday.
"If you need a ruler at home, that week would be a good week to get one," Hofer said.
While some states offer the holiday for a week or weekend, Illinois chose to have the holiday run for 10 day to cover two weekends, Hofer said.
"We sure hope that it's a busy week," said David Vite, president and CEO of the Illinois Retail Merchants Association.
IRMA, which represents more than 20,000 stores including independently owned and large chains, is estimating Illinois families will save at least $30 per family as a result of the tax holiday.
"Retailers are going to be having promotions on top of that," Vite said.
On July 7 the governor signed a bill allowing for a sales tax holiday on most required school supplies -- such as pens, pencils, paper, crayons, etc. -- as well as clothing and footwear priced under $100.
"This is an incentive of his to make sure families can afford to get their children to school with the supplies they need," Hofer said.
A detailed list of what is covered by the holiday and what is not can be found at www.revenue.state.il.us/SalesTaxHolidayList.pdf
"Clearly there are some difficult definitional issues," Vite said, citing the question of whether football shoes are covered. "In this instance, cleated sports shoes are not, but running shoes are."
The state posted an updated list of what is covered under the sales tax holiday after fielding questions about whether supplies for after-school sports and activities are covered.
"And they're not," Hofer said.
Big ticket items such as computers and computer equipment are also not covered by the holiday.
"Schools very rarely require children to have computers," Hofer said.
Hofer said shoppers should remember it is required supplies that children use at school and the type of clothing they would wear to school that are on the approved list.
"If parents and guardians keep those two things in mind, then they're probably covered by the sales tax holiday," Hofer said. "If the child needs to have it on the first day of school, then those items are probably covered."
The state is entering uncharted territory with the holiday. While Illinois has offered incentives for the purchase of high efficiency items such as appliances, it has never offered a sales tax holiday, Hofer said.
"The interesting thing is we've never done this before so we don't know how many people will be buying" something just because of the sales holiday and that's simply for back to school "so we'll be watching this very closely," Hofer said.
The state will not know how much revenue is lost from the sales tax holiday until the end of September, as retailers pay their August sales tax in September, she said.
Merchants are hoping the holiday translates to additional traffic and spending by consumers.
"One of the things we thought is perhaps that extra 5 percent (in savings) might be used to buy some of the things that are nice to have, but aren't required," Hofer said.
"If Florida is a barometer at all, we would expect that there would be close to $1 billion of extra activity in Illinois over the period of time," Vite said.
IRMA has cited a study of the Florida sales tax holiday by the Washington Economics Group, which showed the tax holiday has a positive economic impact, increasing gross sales by about 8 percent for the month in which it is held.
According to the WEG analysis, after eight years of tax holidays, Florida missed out on revenue when it didn't have the holiday in 2008 and 2009. If Florida had held a tax holiday in 2009, WEG said it would have represented an increase in economic activity of about $1.7 billion, boosting Florida's gross domestic product by close to $1 billion for the year. The tax holiday also would have resulted in a net increase of $118 million in state and local taxes as a result of increased economic activity.
The holiday, Vite said, is a positive for consumers, businesses and municipalities. Unlike tax holidays in some states, the local portion of the sales tax remains in place.
"All of those increased sales are going to generate more for local governments," Vite said.
Increased traffic at stores helps generate new jobs and overall sales tax revenues, he said.
The holiday also means that for the first time Illinois will be competitive with bordering states, he said. Iowa's tax holiday runs for two days this weekend. Missouri's lasts for three days. Wisconsin, Indiana and Kentucky don't have holidays.
"We hope to get a lot of across-the-border sales as well," Vite said.
18 states are having sales tax holidays, all of which have been successful, Vite said.
"So we have no doubt Illinois will be as well," he said.
The governor agreed to a one-year trial of the holiday, "but if we're successful we're sure hoping we'll be able to extend it year after year," Vite said.
All of the dollars of savings do end up in the pockets of consumers, he said.
"The road to recovery in these difficult economic times is going to go through retail," Vite said.
Seventy percent of the gross national product is through consumer spending, he said.
"The more we can move the needle upward, the better the economy is going to be," he said.