Sunday, July 27, 2008
Is tax-free weekend's effect on the wallet worth the crowds?
By Susan Stiger
Journal Staff Writer
So you can save 8 cents on a 10-pack of Bic pens. But if you buy a pair of pricey Nikes over the tax-free holiday, your savings is more like $6.50. Go for a computer package and you're looking at $68.
Every 6.75 percent helps. That's the gross receipts tax rate in Bernalillo County, and that's how much you'll save on school-related items between 12:01 a.m. Friday, Aug. 1, and midnight Sunday, Aug. 3. Hundreds of products will be part of the deal, yours for the sticker price without so much as a penny added for taxes. And every store loves a shopping day, so watch for deals, sales, specials, anything to lure you in.
For a list of goods you won't have to pay tax on, go to the State of New Mexico's Taxation and Revenue Web site at www.tax.state.nm.us/. All the classic back-to-school stuff is there — athletic shoes, jeans, T-shirts, jackets, sweaters, underwear. ... But here are a few more tax-free items you may want to spring for: clerical vestments, diapers, bibs, corsets and corset laces, garters and garter belts, fur coats, lab coats, ski masks, suspenders, and prom dresses and tuxedos (not rented).
Computer shoppers, this may be your moment. The tax-free holiday is a particularly good moneymaker for computer stores, but they have to get you in there first. Expect temptations. Laptops, desk tops and notebook computers priced up to $1,000 are exempt from tax. So is a lot of related stuff — blank CDs, cables, mother boards, printers, paper. Zip drives are not on the list. Mice, or mouses if you prefer, are. (This just in: MOUSE is actually an acronym for Manually Operated User Selection Equipment.)
A couple of locally owned stores are gearing up for lower prices and increased sales.
"We see a small spike in business — about 10 to 15 percent," said Stuart Gorelick, owner of Sandia Computers.
Carole Petranovich, who owns Computer Corner with her husband, Joe, said she hopes to sell 50 computers a day. In terms of volume, the short tax-free weekend exceeds the Christmas holidays for her store, she said.
Both Sandia Computers and Computer Corner build systems, and both are bundling packages under $1,000, the price cut-off. Extras, like printers, microphones, modems and speakers have a $500 cut-off. Both stores are reducing prices for added savings, before the tax break.
But if you're not buying a computer and shoes are the highest priced item you spring for, will the savings be worth the crowds? Should you cancel your family's last weekend hurrah so you can by pens, pencils, 3-ring binders and flip flops?
Maria Chavez, mother of 13-, 7- and 5-year-olds, hasn't decided whether to shop that weekend. She's not the kind of woman who comes alive in a crowd. And yet ...
"This year, gas is so expensive," she said, "but you have to deal with the crowds. ... But to save a few bucks ..."
The Journal did a lap around Target, pricing items to dress, say a high school guy and girl. If each gets jeans, a T-shirt for him or a top for her, flip flops and underwear, you're looking at less than a $5 savings for each ensemble. Shoe savings will match that, and go beyond, in tax savings.
At Big 5 Sporting Goods, Heelys (athletic shoes with wheels in the heel, still big among the elementary and middle school sets), regularly go for $60, with a savings of $4.05 in taxes. Nikes can go as high as $95, for a savings of $6.41. Under Armour athletic shoes go for about $70, with a savings of $4.73. If you're buying all three, you're saving $15.19 — heading toward half a tank of gas in a subcompact.
Which brings us to "the more you spend, the more you save." What kid is going to be happy with one pair of jeans, one T-shirt, and a pair of cargo shorts ($19.99, $1.35 savings)? Add up multiple ensembles and multiple kids and the savings become more tempting. (Until the kids come along for the weekend event and want lunch and ice cream or coffee.)
Pens, pencils, highlighters, folders, notebooks, three-ring binders, sticky notes, composition books and on down the "back to school" aisle — not to mention the classroom supplies you're providing to the school — could be good for another $10 to $15 in savings depending on your kids and their needs. And don't forget the backpack, calculator, daily planner, maps, globe and lunch box — at a wide range of costs and tax savings.
No deal on the cell phone, though. Musical instruments, tape recorders and watches aren't tax exempt, either.
Chavez, the mother of three, prefers shopping the deals year-round over the one-shot approach. She usually buys her kids' clothes a size too big at the end of the season for the following year.
"I tend to look at the Sunday paper to see what's on sale," she said. "For whatever's left that I need, I go to Target or Wal-Mart. If you go all at once, you don't get the best deals. I don't pay full price ever for anything."
Except gas. And that may be her deal breaker this year.