Posted on August - 04 - 2010

Many retailers prepare for state’s three-day sales-tax reprieve starting Friday

Retailers are gearing up for the first stroke of Friday business when the sales tax on many items will be lifted and then remain abated until the doors close Sunday.

Tennesseans have “celebrated” the Tennessee Sales Tax Holiday on the first weekend of August since 2006. On that weekend, they get a reprieve on sales taxes, which saves most Tennessee shoppers about 10 percent on their purchases.

In Shelby County, shoppers will not have to pay Tennessee’s 7 percent sales tax or the 2.25 percent local tax.

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Latosha Palmer and other shoppers take advantage of special back-to-school deals at J.C. Penney.

Shoppers collectively saved about $15 million during the first sales tax holiday in 2006, according to the Tennessee Department of Revenue. They have saved $8 million to $10 million every year since.

Those kinds of savings reflect big bumps in sales for any store that sells clothes, computers or school supplies.

Jamie Luter, manager of Wolfchase Galleria’s J.C. Penney store, said the holiday’s sales are second only to the after-Thanksgiving shopping season.

“We’ll have every register in the building running,” Luter said. “It’s huge business.”

Luter said the department store will be staffed at its maximum level over the weekend. Those employees will keep the aisles clear, get customers quickly through checkout and replenish products on store shelves.

“Your store gets worked pretty hard that day, and it takes a lot of extra manpower just to keep tables folded,” Luter said.

David Mueller, senior vice president of marketing and strategic initiatives for Fred’s Inc., said he’s expecting sales bumps in stores this weekend, but the Memphis-based discounter doesn’t really hype the holiday.

Fred’s is not a place customers go for full shopping trips, he said, but rather for many of their basic needs.

“So, many of (our customers) will take advantage of the products we have that fit the sales tax guidelines,” he said. “But for us to do anything over and above that has not proved to be a worthy investment.”

Instead, Fred’s stores will rely on back-to-school displays and advertisements that have been out since July 5, which has been a good strategy for them, Mueller said.

“We’re looking for a very solid business weekend,” Mueller said.

Mueller and Luter agreed that back-to-school shopping remained the backbone of the sales weekend.

A recent study by the National Retail Federation found that the average American family will spend $606.40 on school clothes and supplies this year, for a total of $21.35 billion nationally for K-12 students.

However, the holiday has certainly caught the attention of plenty of shoppers who are not in school or don’t have school-age children. A big draw for these shoppers are cheaper electronics.

A Tuesday evening message to Apple Inc. e-mail subscribers claimed “there’ll never be a better time to buy a new Mac or iPad from Apple.”

– Toby Sells: 529-2742

2010 Tennessee sales tax holiday

When: Starting at 12:01 a.m. Friday and ending Sunday at 11:59 p.m.

Exempt: Clothing under $100 per piece; art and school supplies under $100 per item; computers under $1,500

Not exempt: Clothing accessories, computer storage media (compact disks, personal digital assistants), cosmetics, maps, reference guides, computer printers and accessories

Online: tntaxholiday.com

Holiday hotline: 1 (800) 342-1003

© 2010 Memphis Commercial Appeal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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