TAX NEWS - JUNE 2010

Florida Tax: Sales tax holiday is resurrected

Pasco students might not have a lot to cheer about on the first day of school on Monday, Aug. 16.

But their parents can save a bundle on school supplies and clothes for the kiddies during the resurrected sales tax holiday Aug. 13-15.

Gov. Charlie Crist joined state Sen. Mike Fasano, R-New Port Richey, to trumpet the return of the popular event. They attended a bill-signing ceremony last week at a Target store in the Orlando area.

Fasano had been a big booster of the sales tax exemption on select items.

The tax break disappeared in 2009 as state lawmakers struggled to make ends meet because of budget shortages.

Many Pasco residents still struggling to get through the Great Recession had clamored for the sales tax holiday to be reinstated this fall, according to Greg Giordano, the chief legislative assistant to Fasano.

Equally struggling retailers appreciated the influx of extra shoppers.

So Friday the 13th could signal the start of good luck for consumers this fall.

People can save from 12:01 a.m. Friday, Aug. 13, through midnight Sunday, Aug. 15. The break applies only to the 6 cents the state charges, not the extra, 7th penny Pasco County charges.

During that time people can skip paying the state sales tax on clothing, books and related items valued at $50 or less. It will also exempt from sales tax any school supplies valued at $10 or less.

Fasano had envisioned the event would last for 10 days, similar to the original incarnation.

Because of revenue shortages, however, the 2010 edition of the sales tax holiday was truncated to three days. In addition, fewer items are eligible for the tax break.

Even though the state stands to lose revenue from the sales tax holiday, families and retailers stand to gain, Giordano said.

With three school-age children himself, Giordano suffered some "sticker shock" when the family has shopped for clothes in the past.

"It's extraordinary how expensive it is to buy clothes," even at discount and department stores, Giordano remarked, especially when multiplied by three.

"The sales tax holiday will assist families who need to buy clothes and school supplies for their children," Fasano stated in a press release. "It will also help others who may need new clothes and supplies by forgiving the sales tax on those items."

So exactly what is included in the sales tax holiday? Giordano says the $50 limit applies to most clothing, including all footwear, along with wallets, handbags, backpacks, fanny-packs and diaper bags. Items not included are briefcases, suitcases, garment bags, skis, swim fins, roller blades, skates, watches, watchbands, jewelry, umbrellas and handkerchiefs.

Books are excluded from sales tax.

Schools supplies valued at $10 or less per item are excluded from state sales tax for most pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, binders, lunch boxes, construction paper, markers, folders, poster board, composition books, poster paper, scissors, cellophane tape, glue, paste, rulers, computer disks, protractors, compasses and calculators.

By the way, Giordano notes, the exemption isn't offered on purchases at a theme park, public lodging establishment or an airport.