Sales Tax Free Holiday Week Returns With Mixed Expectations

OCEAN CITY -- Maryland is once again planning on hosting a Sales Tax Free Holiday Aug. 14-20, but opinions vary amongst retailers as to just how much business the event has delivered in years past.

The holiday, which has been hosted sporadically over the last few years, offers consumers in Maryland one week without the standard 6 percent sales tax on most clothing and footwear priced up to $100. The goal of the event is to attract shoppers who might otherwise head to surrounding states like Delaware that don’t apply sales tax.

“It allows us to compete with the outlets [in Delaware],” said Sherri Elliot, manager of MR Ducks on 140th Street.

Elliot pointed out that her store straddles the state line and potential customers might bypass the location to take advantage of tax-free Delaware. Though Elliot wasn’t managing the store during last year’s holiday, she has experienced the tax free week in some previous incarnations and said the event does have a positive impact.

“It’s always generated more business for us,” she said.

Mark Pugh, co-owner of K-Coast Surf Shop, was less impressed with the holiday. He noted the week of the holiday was generally a busy time for his store anyway with back-to-school shopping beginning to peak. In Pugh’s opinion, shoppers are out engaging retail for the annual back-to-school sales, which may be in the 20-25-percent off range for certain items. Compared to that, shaving off 6 percent is less noticeable.

In fact, according to Pugh, many of his customers aren’t even aware of the holiday and the money saved comes as a pleasant, but totally unexpected, surprise.

Victorian Charm owner Debbie Frene agreed, saying, “I don’t know if anyone here is even that aware of it.”

For those who do know about it, Frene also agreed the 6-percent off could be viewed as a drop in the bucket compared to other sales.

“People like the idea, but I don’t know if they go shopping for it,” she said.

Both Pugh and Frene predict that the holiday may have a greater impact in central and western Maryland, as opposed to the more seasonal, tourism-oriented shore.

“We have a kind of tourist customer base this time in August,” stated Pugh. “We’re selling items they can’t get back at home.”

At the state-level, however, organizers of the holiday haven’t noticed any difference in customer interest for the event based on location.

“The Tax Free Week was a great success last year. It got consumers out shopping again after suffering hard economic times,” said Maryland Retailers Association President Patrick Donoho. “This year, we hope more consumers will take advantage of the substantial savings offered by local retailers during this week.”

He added that the sale was designed to coincide and complement back-to-school shopping to give whatever deals retailers already have in place an extra kick.

“Times continue to be tough for families in Maryland as the economy slowly recovers. Tax Free Week provides some help to families as they shop for back-to-school clothes and shoes,” said Donoho.

Though exactly how much business the holiday generates is difficult to gauge, Donoho said he’s seen double digit sales increases for some stores during the time period. How much of that is because of the event, and how much can be attributed to annual back-to-school shopping is debatable.

While retail outlets don’t all agree on how much business the holiday brings in, none of them are not opposed to it either.

“It most certainly can’t hurt us,” said Pugh.