Florida back-to-school tax holiday promises needed traffic for retailers

While it’s not clear if all school districts will allow students to return to class soon in the age of coronavirus, the annual Florida back-to-school tax holiday is going through and it can’t come soon enough for retailers in the state.

The tax relief that runs from Aug.7-9 eliminates any sales tax for specific retail items that relate to school supplies in Florida and was designed to give parents a bit of a financial break when buying classroom needs for kids. But this year, the special exemption brings on additional significance for businesses and stores that have been hammered by the impact of the COVID-19.

“It’s very important for small business owners this year,” said Bill Herrle, Florida Executive Director for the National Federation of Independent Businesses. “Traffic has been light… .

“We need to take advantage of every step we can this year to boost consumer confidence and that it is safe to return to retail shopping,” Herrle said.

It appears consumers will be flocking to Florida stores to take advantage sales before students return to schools, too. The National Retail Federation conducted a survey of 7,481 consumers across the country between July 1-8 and found found families of students between kindergarten and 12th grade are prepared heartily before classes begin.

About 63% of those consumers say they expect to buy a computer for their students and expect to spend $274.44 on average for each student. That’s an increase of about $71 from last year.

“Florida retailers stand ready to help families meet their school supply needs this year,” said Scott Shalley, president and CEO of the Florida Retail Federation. “Whether children are learning from home or heading back to school this fall, families can safely shop and save money over the tax-free weekend.”

The sales tax holiday on back-to-school merchandise began in Florida in 1998 and wipes out any sales taxes and local option taxes on those items. The action needs to be renewed every year by a vote in the Florida Legislature which usually approves the renewal. But it was not renewed from 2000 to 2003 and it was blocked from being renewed again in 2008 and 2009 and has been renewed every year since 2010.

The collective amount of savings for Florida consumers for the three days of tax exempt school merchandise shopping is expected to save $41.8 million this year, according to the Revenue Estimating Conference, which is a wing of the Florida Legislature’s Office of Economic Demographic Research.

While back-to-school shopping is a big draw for retailers, the tax holiday for that weekend is not the only tax holiday in Florida. A hurricane supplies sales tax holiday was held May 29 to June 4 in Florida for the state’s residents who were stocking up on supplies and safety gear as the official hurricane season got underway.

While the sales tax holiday is important to all businesses, Herrle said it’s acutely prescient for small businesses this year as the coronavirus outbreak shows no sign of ending soon.

“I fully expect small business owners will put extra effort into the tax holiday this year,” Herrle said. “We are seeing a lot of innovation. That’s what small businesses are known for… .

“Regaining anything that can be done, including a sales incentive or cost incentive, to bring the customers back is something we need to  be very appreciative of this year. Generally, we always look forward to the sales tax holidays. But I think this year, any shot in the arm is going to be very appreciated by small business owners this year,” Herrle said.

Many of the back-to-school sales tax holiday items that qualify for exemption include:

• Clothing, footwear, and certain accessories selling for $60 or less per item.
• School supplies selling for $15 or less per item.
• The first $1,000 of the sales price of personal computers and certain computer-related accessories, when purchased for noncommercial home or personal use.

The state provides a detailed list of stipulations.