OUR OPINION: Tax breaks pay off best with planning

By NEMS Daily Journal

Mississippi’s annual pre-fall semester tax holiday encouraging local back-to-school shopping began today at 12:01 a.m. and ends at midnight Saturday. All but a few municipalities are participating.
Some businesses voluntarily offered the equivalent of tax discounts to customers earlier this week, but those taxes must be paid to the state by the retailers.
The state’s list of qualified items is not inclusive. Some things are excluded, and all items $100 and more are ineligible.
Clothing and footwear items, meant to be worn next to the body and costing less than $100, are exempt from sales tax during the holiday. Accessories, including jewelry, handbags, wallets, backpacks and similar items are not covered nor are items used in athletics.
School supplies and computers are not included, an exclusion that is strange, considering that the exemption is billed as a back-to-school tax holiday.
Despite exclusions, shoppers can find at least 7 percent savings on some items because of the sales tax exemption.
Local retailers, whose employees live in the region, where wages and profits have a direct impact, are mainstays of the in-state economy. Mississippi’s revenue stream is heavily dependent on sales tax, which is a regressive levy, hitting every person and having greater adverse impact on lower-income individuals and households.
The statewide sales tax rate, 7 percent, is among the nation’s highest.
The website Smart Money reported Thursday that Mississippi’s tax-exempt weekend is the first of many nationwide, most coming in the next two weeks.
“The best prices are going to be in the next two weeks,” said Jeff Green, an independent retail analyst. By stacking the tax savings with the school sales, consumers can shave up to $48 off the average spending of $689 on kids in grade school; and up to $63 on college-bound teens’ average $907 tab, he noted.
State participation in the tax holidays continues to grow. They’ve “been tremendously successful at drawing consumers into stores,” said J. Craig Shearman, a spokesman for the National Retail Federation. The business boost and consumer goodwill can be more valuable than tax revenue, he says. So far, 17 states have enacted summer promotions. Georgia brought back its August tax holiday this year after a hiatus from 2010-2011 the state attributed to budgetary concerns, and Alabama, which first offered a holiday in 2011, renewed it for this year.
Careful planning, most spending experts suggest, is the way to make the most of the rare but popular state decision to tax less.