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This summer, more than a dozen states are offering buyers a discount on back-to-school sales taxes.
Whether it is enough to lure legions of parents to family stores amid a pandemic seems doubtful.
Depending on the state you shop in, you can stop paying between 4% (Alabama) and 7% (Tennessee) when you buy clothes, shoes, and school supplies on select weekends, according to the personal finance site WalletHub and the Federation of Tax Administrators.
These are the 16 states that offer a back-to-school break this summer: Alabama, Arkansas, Connecticut, Florida, Iowa, Maryland, Massachusetts, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas and Virginia.
Five states currently do not assess a sales tax. They are Alaska, Delaware, Montana, New Hampshire, and Oregon.
A cruel summer
The timing of this year’s tax holidays is less than auspicious.
“The rhetoric is that one of the beneficiaries of the sales tax exemptions are these local Main Street businesses,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
“The problem is that in many places, those businesses are closed,” he said. “Who are you helping? Walmart, Target and other big chains that have the resources to stay open.”
In fact, as of July 10, some 26,119 stores and retailers were closed, according to Yelp data. About half of those companies have closed their doors permanently.
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Also, parents still don’t know what the school year will be like.
They may be less inclined to renovate children’s closets and buy new backpacks if their children are going to be spending most of their time learning remotely at home, Gleckman said.
Finally, the tax breaks come at a time when state coffers are under pressure, due to falling sales and income from income tax.
The layoffs and the closure of businesses have hampered state budgets, which fell $ 110 billion during fiscal year 2020, according to estimates from the Center for Budgets and Policy Priorities.
Fiscal year 2021, which began July 1, is already looking worse: Budgets face an estimated deficit of $ 290 billion, according to the center.