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Storm season gets less taxing

Retailers line up their tarps, batteries and generators for the state’s second stab at getting you to get ready early.

By MARK ALBRIGHT
Published May 18, 2006

Florida’s second annual hurricane preparedness sales-tax holiday begins a 12-day run on Sunday.

While legislators and retailers both declared the inaugural year a success, lawmakers weren’t done making their final changes this time until the very end of the legislative session. That left retailers less than two weeks to get the goods in the stores, set up all the displays and prepare the ads.

“It wasn’t that big a problem because everybody already had the trigger cocked,’’ said Rick McAllister, chief executive of the Florida Retail Federation. “The point of the tax holiday is to heighten people’s awareness to plan ahead for the hurricane season.’’

The state expects to forgive about $41-million in sales tax collections by making a laundry list of hurricane recovery products that can be sold tax-free from May 21 through June 1. The holiday stretches over two weekends.

Generally, lawmakers tried to limit the tax-free treatment to goods people need to survive during and after a hurricane. That includes things such as generators, coolers, flashlights, ice chests and radios.

Lawmakers included most types of batteries, but not the ones sized for use in tiny electronic gadgets such as hand-held video games or garage door openers.

This year some changes were made. Although ice, like most food, has always been tax-free year round, lawmakers made blue artificial ice packs tax-free for 12 days. They added AAA batteries to the list of exemptions this time after realizing many portable radios use that size.

Several types of bungee cords and ratchet tie-down devices were declared tax-free for the first time, too.

The biggest change, however, is the addition of storm shutter system devices that cost less than $200. To keep people from hoarding plywood or just buying it for other home improvement projects, lawmakers again chose not to exempt plywood from taxes.

But they added storm shutter devices such as the wood or metal slat-like systems that fit in a special frame over exterior windows.

Retailers — from drugstores and discount stores to hardware and home improvement chains — are feverishly creating hurricane preparedness displays, grouping together products that qualify as tax-free and making the event a major talking point in their advertising.

“We’re geared up and rarin’ to go,’’ said Don Harrison, spokesman for Home Depot Inc. “We’ve learned this really works. During the hurricanes in Florida last summer we saw much shorter lines because people stocked up ahead of time.”

It’s also likely that people were well stocked after the state endured perhaps the most destructive string of named storms in state history over the past two summers.

Retailers do not consider the tax-holiday that huge a sales opportunity even though the sales-tax collections are forecast this year to exceed any of the previous back-to-school tax holidays. Studies have shown that shoppers today are not motivated to buy until discounts top 40 percent. That’s a far bigger price cut than what in most counties is a 7.5-percent sales tax break.

But many retailers see the tax holiday as a way to add some order to hurricane season shopping that gets more panic-driven closer to an actual storm event.

Many chains are adding their own discounts on top of the sale tax cuts to keep their share of the business.

“Most Floridians need no reminder of the potential damage presented by hurricanes,’’ said Jim Frasso, senior vice president of southeast store operations for Lowe’s Inc.. He complimented the state government for being so pro-active about prodding people to safeguard their homes before the storm season.

Lowe’s is offering how-to-clinics, hurricane tracking maps and 12-month, no-interest financing for some big ticket storm protection merchandise.

Newcomer Northern Tool & Equipment in Tampa is one example of another retailer expecting to sell a lot more power tools, gas cans and tarps.

The chain moved all the hurricane-related goods to the front of the store and quadrupled its stock of power generators. Only generators priced at $1,000 or less are tax-free. So Northern extended the same 7.5-percent savings to any of the huge generators it sells.

“About the biggest you can buy for $1,000 is 5,000 watts and it would power your lights, a TV and two refrigerators,’’ said Damian Freeman, manager of the Tampa store. “We’ve got them up to 15,000 watts in the store and custom-ordered ones up to 60,000 watts. I had a guy in here last week buy a $20,000 generator that powers his whole farm.’’

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified May 18, 2006, 21:27:43]