Weeklong sales tax break starts Sunday for Maryland shoppers

As Kala Craig combed through a sales rack at Wee Chic in Lutherville, shopping for a baptismal dress for her daughter, she said she’s looking forward to Sunday.

Sunday is not only the day of her daughter’s baptism, but also the first day of Maryland’s tax-free week — and just in time for back-to-school shopping.

Craig’s 4-year-old son and 2-year-old daughter are quickly outgrowing everything, from clothes to furniture.

“It’ll make a big difference in these larger items,” the Laurel resident said.

Shop Maryland Tax-Free Week runs from Sunday through Aug. 18. Clothing and footwear under $100 will be exempt from the state’s 6 percent sales tax. The first $40 of a backpack or book bag are also exempt.

Families with children in elementary through high school are expected to shell out an average of $685 per child on back-to-school spending, according to the National Retail Federation. College-bound students will spend an average of $940. The federation expects more than $82 billion to be spent this year on back to school shopping.

Craig, whose children attend preschool at the Jewish Community Center, wants to save money for her kids’ college education.

“Every cent counts,” Craig said. “So if we have the tax-free exemption that means we can put money away for future investment.”

The full list of tax-exempt items includes products from adult diapers to bridal dresses to corsets, but many retailers focus their promotional efforts on back-to-school shopping.

The timing of tax-free week is intentional, according to a spokesman for Maryland Comptroller Peter Franchot.

“It tends to be a relatively slow week for retailers. It’s the middle of August,” spokesman Alan Brody said.

Tax-free week typically brings more shoppers to Ma Petite Shoe in Hampden, owner Susannah Siger said.

“It is a way to capture the people that are here and give them something fun to do,” Siger said. “It makes the least-busy time a little bit busier.”

Customers appreciate tax-free week, said Lori Isaac, one of Wee Chic’s managers.

”And we love it as a small business,” she said.

Families with young children are expected to spend the bulk of their back-to-school budgets on apparel, said Ana Serafin Smith, a retail federation spokeswoman. Shoes, backpacks, lunch boxes and electronics are also popular.

Electronics are not on the list of tax-exempt items, but savings on eligible items can prompt families to make larger purchases.

Nicole Deford, 41, picked through a rack of dresses at Wee Chic for her 1-year-old daughter.

But for tax-free week, Deford is thinking about what she might buy for herself. Her birthday is next week.

“This tax-free opportunity pushes you to get the items you would consider a splurge,” she said. “It’s a good time to take advantage and hit those items on the list that have been in the figurative shopping cart.”

Big-box stores such as Target and Walmart take extra steps to direct customers to tax-exempt items.

The Walmart store in Cockeysville will use signs and announcements to highlight kids’ clothing and shoes, co-manager Bryan Vance said.

Laketia Knott, a preschool teacher from Ednor Gardens, said she’s looking forward to snagging deals on shoes and clothes for her children. Knott has a daughter and son at Baltimore Polytechnic Institute and two sons at Northwood Appold Community Academy Public Charter School.

“For me, it’s a big load lifted off of me because I have four kids,” Knott said. “It would be helpful if it happened more than once a year.”

Retailers know parents such as Knott are looking for deals this time of year.

Adam Sitzes, the manager of a Target store in east Baltimore, said the store would offer a 20 percent discount on school uniforms through Saturday. He also planned to increase staffing in the store during the week.

Tax-free week “helps drive traffic into the building,” Sitzes said. “Back-to-school and back-to-college season is our second-largest peak after holiday.”

It is not uncommon for retailers to stack on additional promotions during tax-free week.

“Stores can use it as a form of promotion and use it to promote other things in their stores that aren’t necessarily tax-free,” said Marie Yeh, a marketing professor at Loyola University Maryland. “It drives traffic.”

Siger, whose Hampden store specializes in socks and European shoes, will offer a 6 percent discount to shoppers. She said it would help certain items dip below the $100 limit for tax exemption.

“It’s just kind of like a fun and surprising thing for people,” Siger said. “Any reason to shop in Hampden, we embrace.”

Smith, of the National Retail Federation, said some consumers delay their shopping so they can take advantage of the promotions.

“A lot of shoppers tend to wait until tax-free week in their state or a nearby state to buy some of the more expensive items on their lists,” she said. “Because they’re getting that savings from taxes, they’re going to spend $20, $30, $50 more.”

As shoppers flock to malls, department stores and locally owned shops, the state officials expect Maryland to lose about $7 million in sales tax revenue.

“Of course we’re going to lose money,” said Brody of the comptroller’s office.

He said the state will make up for some of the loss when shoppers purchase additional, non-exempt items.

Online shoppers can also reap the benefits of tax-free week, but analysts believe the annual event does push buyers into physical stores.

“It really encourages them to shop in brick-and-mortar stores in the state,” said Cailey Locklair Tolle, president of the Maryland Retailers Association. “It’s a much-needed bump that retailers appreciate.”

Emily Howell, 37, shopped at Wee Chic for a birthday gift for a friend’s son on Thursday. She planned to return next week to buy school clothes for her 4-year-old son, who starts pre-kindergarten in Towson this year.

Howell has two children.

“I spend so much on their clothes,” Howell said. “This is big for extra savings.”

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