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Tax holiday is this weekend in chaos of 2020

Computer Corner technician Travis Longcope, left, helps customer Vanessa Marin on Tuesday. The store is getting ready for this weekend’s tax holiday, typically its major sales event of the year. (Adolphe Pierre-Louis/Albuquerque Journal)

Copyright © 2020 Albuquerque Journal

Even with the chaos of this unpredictable year, New Mexico’s annual back-to-school sales tax holiday will still take place this weekend as scheduled.

This year, the New Mexico Gross Receipts Tax Holiday begins at 12:01 a.m. Friday and ends at 12:01 a.m. Monday, according to the New Mexico Taxation and Revenue Department.

During that window, the state suspends collection of gross receipts tax on sales of qualifying items – which range from laptops to backpacks to sneakers – allowing shoppers to buy them tax free.

Charlie Moore, spokesman for the state tax and revenue department, said the holiday saves shoppers around $4 million statewide during a typical year.

However, with the COVID-19 pandemic disrupting the traditional back-to-school shopping season, it’s difficult to predict how different the tax holiday’s impact will be in 2020.

“This year, who knows?” Moore said.

Last month, Gov. Michelle Lujan Grisham delayed in-person instruction at all New Mexico public schools until after Labor Day in response to a spike in COVID-19 cases, which could change how and when shoppers buy school supplies.

A survey published in July by the National Retail Federation showed consumers nationwide plan to spend a record amount on school supplies in 2020, as more shoppers expect to buy computers and other electronics this year to prepare for remote learning.

This trend stands to affect local businesses like Computer Corner, near Menaul and Carlisle in Albuquerque. Co-owner Carole Petranovich said the tax holiday is always a major event at her store.

“It’s our biggest retail time of year,” Petranovich said Tuesday. “It’s bigger than the regular Christmas holidays and year-end holidays.”

Petranovich said she thinks this year will be a little different. In addition to serving walk-ups on Friday and Saturday, Computer Corner always takes pre-orders for the two weeks prior to the tax holiday. That allows customers to pay for their purchases during the weekend, and pick up their wares when crowds have dissipated.

This year, Petranovich said, pre-orders are down, and she’s unsure how many shoppers will show up in person.

“We don’t know what to expect over the weekend because, of course, we can only let a certain number of people into the store,” she said.

Petranovich plans to have staff at the door to monitor volume in the shop, pass out face masks to customers trying to enter without one, and hand out fliers to anyone who has to wait outside for their turn to enter.

She said despite the uncertainty, she hopes people will support local businesses during the tax respite.

“There’s a big push for that right now anyway because of the economy and the jobless rate,” Petranovich said. “I think that this is just a very important year for (supporting local business).”

Computers priced under $1,000 and related hardware priced under $500 may be sold tax-free on Friday, Saturday and Sunday, according to the state tax department.

Additionally, clothing and shoes priced at less than $100 per unit, and a wide range of back-to-school supplies under $30, may be sold tax-free during the weekend.

Moore said one recent change is that online retailers may now choose to take advantage of the deduction as well. According to the retail survey, 55% of K-12 shoppers said they will buy online, up from 49% last year.

Moore reminded those looking to shop in person during the tax-free weekend that the state’s public health order will continue to limit occupancy and require masks. The state tax department is asking shoppers to follow social distancing guidelines.

Journal business editor Gabrielle Porter contributed to this report.

 

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