[Editor’s note: A list of non-taxed items appears at the end of this article.]

The most locals governments ever—267 cities and counties—will be participating in the Sales Tax Holiday. While St. Clair County participates, neighboring Jefferson County will not. Last week Jefferson County’s Commission cited its billion-dollar debt and needing to make payroll reasons for not participating.

58 of Alabama’s 67 counties will participate in this year’s sales tax holiday, two more than in 2009.

The average family with school-aged children in the South is expected to spend $615.97 on back-to-school items, which is a $111 more than what they had been expected to spend last year, according to the National Retail Federation.

St. Clair County is participating in this weekend’s Sales Tax Holiday.

County Commission Chairman Stan Batemon explained the reason St. Clair has again signed onto the program.

“We know that times are tough right now out there for everyone; more so than they have been for many years,” Batemon said, adding that while the county has money during the recession, many residents might not.

“Some of the pressures of the economy are weighing on many people in this county. We’re okay as a county entity; but there are many families not dong okay,” Batemon said. “As a government St. Clair County is doing okay. We’re all gonna be in this economic downturn pain for some time, we think. Now of all times it’s good for us to make it as easy for people to get through that in order to survive and keep maintaining their households. Of course going back to school is a big thing on a lot of people’s plates. To alleviate that at all is something we try to do.”

18 states have sales tax holidays: 16 are in August, nine are on the same weekend as Alabama. Tennessee is the only surrounding state to have a sales tax holiday on the same weekend as Alabama.

Georgia’s loss is Alabama’s gain. Georgia did not renew its tax holiday this year due to budget constraints, opening the door for our neighbors to the east to visit Alabama and shop tax free.

Alabama offers more tax free items than Mississippi or Florida. Only clothes and shoes are tax free in Mississippi, while Florida has lower thresholds for clothes and school supplies. Neither offers tax-free computers.  

In the first three years, the sales tax holiday actually had a positive effect on state revenue. August 2008 state sales tax collections ($180,257,154.96) represented an almost 24 percent increase over the same month sales in 2005 ($145,482,717.74) when the state didn’t have a sales tax holiday. The sales tax collection growth rate in the month of August by years is:

2006: 10.4 percent

2007: 4.6 percent

2008: 7.28 percent

 Even in the one negative year, sales tax collections for August exceeded pre-sales tax holiday numbers. While the $147,408,395 in sales tax collected in August of 2009 represented an 18.22 percent decline behind what was collected in August of 2008, tax collections for that month still exceeded the August 2005 collections when the state didn’t have a sales tax holiday.

The sales tax holiday weekend is big business for retailers. The volume of business retailers do this weekend can come in right behind after-Thanksgiving or after-Christmas sales periods, especially for those that sell one or more of the tax-exempt items.

Items not being taxed this weekend, according to the Alabama Dept. of Revenue:

Clothing—$100 or Less, per article of clothing

Exempt:  

Includes all human wearing apparel suitable for general use (not an all-inclusive list):

Belts, Boots, Caps, Coats, Diapers, Dresses, Gloves, Gym Suits, Hats, Hosier, Jackets, Jeans, Neckties, Pajamas, Pants, Raincoats, Robes, Sandals, Scarves, School Uniforms, Shirts, Shoes, Shorts, Socks, Sneakers and Underwear

Computers, computer software, & school computer supplies—A single purchase with a sales price of $750 or Less  

Exempt:

Computers—For purposes of the exemption, a computer may include a laptop, desktop, or tower computer system which consists of a central processing unit (CPU), and devices such as a display monitor, keyboard, mouse, and speakers sold as a computer package.  Computer parts and devices not sold as part of a package with the CPU, will not qualify for the exemption.

Computer software

School computer supplies—An item commonly used by a student in a course of study in which a computer is used

– All inclusive list includes:

* Computer Storage Media (diskettes, compact disks)

* Handheld electronic schedulers, except devices that are cellular phones

 *Personal digital assistants, except devices that are cellular phones

* Computer Printers

* Printer Supplies for Computers (printer paper, printer ink)

Taxable:

Furniture  

Any systems, devices, software, peripherals designed or intended primarily for recreational use, or  

Video games of a non-educational nature

 School supplies, school art supplies & school instructional material—Sales price of $50 or less, per item (noncommercial purchases)  

Exempt:

School supplies (all inclusive list):  

Binders, Blackboard Chalk, Book Bags, Calculators, Cellophane Tape, Compasses, Composition Books, Crayons, Erasers, Folders (expandable, pocket, plastic & manila);  Glue, paste, and paste sticks

Highlighters, Index Cards, Index Card Boxes, Legal Pads, Lunch Boxes, Markers, Notebooks, Paper (loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper), Pencil Boxes and Other School Supply Boxes, Pencil Sharpeners, Pencils, Pens, Protractors, Rulers, Scissors, Writing Tablets

School art supplies (all inclusive list)

Clay & Glazes, Paints (Acrylic, Tempora & Oil), Paintbrushes for artwork, Sketch and Drawing Pads, Watercolors

School instructional material (all inclusive list)

Written material commonly used by a student in a course of study as a reference and to learn the subject being taught)

Reference Maps and Globes

Required Textbooks on an official schoolbook list with a sales price of more than $30 and less than $50

Books—sales price of $30 or less, per book (noncommercial purchases)

Exempt:

Books—The term book is defined as a set of printed sheets bound together and published in a volume with an ISBN number.