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VRA in the News

Sales tax holiday designed to boost business coming

Burlington Freepress, 7/4/2008

By Brandon Canevari, Editor

MANCHESTER — A free sales tax weekend will be taking place on July 12 and 13, but how it will affect the local economy remains to be seen.
"This is a perfect opportunity for retailers to do promotions " said Executive Director of the Manchester and the Mountains Regional Chamber of Commerce Jay Hathaway. "I think it will encourage buying in that period of time."
According to visitor services and membership manager of the chamber, Beth Meachem, the effort to turn the concept into a reality was driven by the Vermont Retail Association.
Tasha Wallis, executive director of the association, said the concept stemmed from discussion about how to stimulate the local economy in conjunction with the stimulus checks that were being issued nationwide.
"We are hoping that it is [going to be] a very active shopping weekend. [By] the sales tax holiday almost everyone should have used their rebate checks."
She continued to say that the National Retail Federation did a survey indicating that while consumers would be using a portion of their rebate checks to pay off other things some of it would be used for shopping.
A similar sales tax holiday has taken place in Massachusetts for several years, Wallis said, and has always been successful.
Wallis said that from what she has heard many stores are excited about the tax free holiday and are planning on running promotions in conjunction with it. Additionally, she said that the association expects to see an influx in Canadian shoppers because of the strength of the Canadian dollar.
Meachem said the chamber first found out about the free sales tax weekend about a month ago and since then has been working to promote the event.
Over this past week Meachem said the chamber has been distributing information about the event to its members to help promote it. In addition to posters that the chamber will be putting up, Meachem said they have advertised it on their connection page, communicated with their members through the internal news format, have put it in advertising that will go beyond state borders and will probably try to announce it on the radio as well.
While Meachem is hopeful that the town will see an increase in business over the weekend, some businesses — such as Friends of the Sun and r.k. Miles — aren't expecting miracles.
"A lot of the products people buy from us require a lot of advanced planning and if they're able to take advantage of the sales tax holiday great, but it's unlike a consumer item like a dishwasher or appliance. Typically a lot of the products we sell take time for planning," said co-owner of r.k. Miles, Joe Miles. "The other thing is so much of our business is based on contractors buying things for their customers."
Co-owner of Friends of the Sun, Jackie Borella, also felt that weekend would not increase their business much.
"Most of the products we sell are over $2,000 so any big sales are going to fall outside the parameters of the sales tax holiday," she said.
There are a number of rules that apply to the sales tax weekend. One of the largest is that any single item of tangible personal property with a selling price in excess of $2,000 will be taxed. Other items not included in the sales tax holiday are amusement charges, charges for telecommunication services including prepaid telephone cards, charges for cable television service and season passes for ski resorts.
Also, according to the Vermont Retail Association's Web site, items which are normally sold together cannot be split to obtain the tax exemption, but coupons and discounts can reduce the price below the threshold allowing people to obtain the exemption.
If a customer purchases an item prior to the sales tax holiday and returns it during the holiday and receives credit toward another purchase, no tax will be charged as long as they purchase that item during the holiday.
Rain checks also apply during the holiday. If a customer wants to purchase an item that is out of stock they can do so without being charged the tax. In addition, there are also certain conditions that make layaways and rentals eligible during the tax free weekend.
For more information on the tax free weekend visit www.vtretailers.com.