One more sales tax holiday on tap
By HELEN HUNTLEY
Published October 1, 2006
Another Florida sales tax holiday starts this week, which means this could be a good time to save a few bucks on a washing machine or a ceiling fan - provided that you need one.
At least 14 states have sales tax holidays this year, but Florida is the champion with three of them. Most sales tax holidays are tied to back-to-school shopping season, but jeans and backpacks were just the starting point for Florida legislators. This year we've had a sales tax holiday for batteries, generators and other hurricane supplies, and now we're getting one for energy-efficient appliances.
The latest holiday, which starts Thursday and runs through Oct. 11, removes the sales tax on noncommercial purchases of new dishwashers, clothes washers, air conditioners, ceiling fans, light bulbs, dehumidifiers, programmable thermostats and refrigerators that meet Energy Star standards and cost no more than $1,500.
Whom do these holidays benefit? Start the list with the politicians.
"They can say they're giving a tax benefit to people and helping retailers," said Dan Shibley, state tax analyst for tax research publisher CCH in Riverwoods, Ill. He said the popularity of the tax holidays is growing even though their benefits aren't easy to quantify.
Florida Tax Watch supports the holidays based on retailers' statements that the tax breaks boost consumer spending. Many retailers conduct their own sales promotions in conjunction with the holidays.
"Consumer spending is truly stimulating sales; it is not simply a case of people delaying or accelerating their purchase to take advantage of the tax-free status," Tax Watch concluded in a 2002 report. "The increased traffic benefits all stores in a shopping area, from jewelry and electronics stores to food courts. This means that there are some increased tax collections, not just losses during this time."
Some shoppers wait for the sales tax holidays, but many others are indifferent. Kathryn Vetter, 44, of Dunedin said she did her back-to-school shopping at an outlet mall before this year's tax holiday.
"For me it's just a matter of timing," she said. "If I'm in the store and it's there, it's not worth it for me to go back home and wait for the tax holiday. I tend to be a more opportunistic buyer just because our life is so hectic. ... And I don't want all the good stuff to be gone."
The state Legislature's Office of Economic and Demographic Research says popular holidays have a noticeable effect on general revenue, estimating that this year the back-to-school holiday would cut state sales tax collections by $32-million and the hurricane holiday by $33.8-million. The forthcoming holiday for energy- efficient products is projected to produce a mere $2.2-million in revenue reductions. Those numbers don't include revenue lost to local governments.
For consumers the only down side is the encouragement to buy things we don't need simply because they're on sale and we're getting a tax break. But if you were buying anyway, the holidays boost your spending power. In the case of appliances, the tax break at least partly offsets the cost of upgrading to more energy-efficient models. Check the Department of Revenue Web site www.myflorida.com/dor/ for details on what qualifies for the latest break. State officials predict refrigerators will account for nearly a third of the tax holiday's sales.
I am a full-time Florida resident who sold vacant land in New York in 2003. I did not pay New York state income taxes on the basis that federal legislation bans state cross-border income taxation of nonresidents. Now New York is trying to get me to pay those state income taxes on my profit. Can you cite the specific federal legislation that bans that type of tax?
You are recalling legislation that stops states from taxing the pension income of nonresidents.
Federal law does not prevent a state from taxing a nonresident's income from the sale of property or other business activities. Professional athletes have to pay state income taxes on part of their earnings in nearly every state where their team plays.
Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, write email@example.com or Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731. Read more questions and answers at http://blogs.tampabay.com/money