Retailers prepare for S.C.’s tax-free holiday weekend

South Carolina’s tax-free holiday is a boon to retailers, as back-to-school shoppers flock to stores to buy everything from pencils to computers to clothes.

Mall hours are extended and freestanding retailers from Wal-Mart to Target and Best Buy roll out early specials in preparation for the bargain-hungry crowds they expect to see as the August countdown to the start of school begins.

The 16th annual version of the holiday starts Friday and runs through Sunday. However, experts say that, like Black Friday, a careful shopper can get just as good a deal before or after the weekend.

“There’s a little bit of a shell game out there,” said Robert Martin, an economist with the S.C. Board of Economic Advisors. “If you watch the circulars, you can get the same things on sale well before the tax-free weekend — just as good or better.”

However, he added, if you aren’t a savvy shopper, the weekend is a good time to save a few pennies the easy way. “The people who benefit are the last-minute shoppers,” he said.

Scott Anderson is marketing manager for Columbiana Centre in Harbison and three other malls in Georgia. To help boost crowds, Columbiana will have extended hours, a back-to-school fashion show Saturday and a school supply drive for needy children.

He agreed that careful shoppers can find better deals — say 10 percent to 20 percent — that eclipse the 6 percent state sales tax break. But if shoppers can bundle coupons or other deals with the tax-free weekend, it can be a boost in savings.

Plus, he said, people just like the idea of not paying sales tax. “People respond to it. Tax-free resonates with them.”

The exemption also includes local sales taxes collected by the state.

Molly Blakeman, a national spokesperson for Walmart, said back-to-school shopping is the second-largest selling season behind the holidays. “We know it’s going to be a busy weekend and our stores are going to be prepared,” she said.

Local gross sales and tax collections specifically for the tax-free weekend are not available from the S.C. Department of Revenue. However, on average, sales tax collections during August dipped by $9.5 million annually compared with July collections during the past 5 years.

Sales taxes dipped even though total retail sales were stronger in August during the last five years than in July and September.

Tax collections for August 2014 were $220.7 million compared with $225.6 million in July 2014 and $223 million in September. Gross sales in the state approached $16 billion in August of last year, compared with $14.2 billion in July and $14 billion in September.

And the holiday seems to becoming more popular. In August 2010, gross sales in the state were slightly more than $12.5 billion, while tax collections for the same period were $198.8 million

“It’s been steadily increasing,” Bonnie Swingle, a spokesperson for the revenue department, said of the holiday’s sales. “So we could say that will continue to go up.”

But Martin, the Board of Economic Advisors economist, said the holiday from a strictly fiscal standpoint isn’t worth it. “It’s more political,” he said. “It’s one of those touchy feely things that sound good to the voters, usually lower-income individuals.”

But the politics seem to be real. Florida and Georgia dropped the holiday, then brought it back. North Carolina canceled the holiday last year.

Despite that, experts say that the holiday in South Carolina won’t be going anywhere soon. Politicians embrace it. And, most importantly perhaps, customers respond to it.

“They show up,” Anderson said.

This story was originally published August 3, 2015 at 7:36 PM.