The city of Athens could lose about $32,000 in anticipated sales tax during the upcoming statewide tax-free holiday.
“We don’t know exactly how much it will be,” said Athens City Clerk John Hamilton. “It’s really a wild guess.”
During the holiday — Aug. 4 through Aug. 6 — shoppers throughout the state won’t pay the 8-cent sales tax on back-to-school purchases. Athens receives 2 cents of the 8 cents collected. The city gives half of what it collects to city schools.
Using the same formula as the city of Madison, Hamilton estimated that 40 percent of the population would take part in the tax-free shopping day. They would spend approximately $200 each. The city would forego 2 percent of the sales tax that would have been collected.
So, Hamilton took 20,000 people times 40 percent times $200 times 2 percent and came up with $32,000.
To a city, it is a lot of money to forego. To the individual shopper who spends approximately $200, it’s a savings of $16.
The tax holiday applies to the following purchases:
•Clothing up to $100 per item.
•Computers, software and computer supplies up to $750 per item.
•School supplies and textbooks up to $50 per item.
•Other books up to $30 per item.
State lawmakers approved the holiday to give shoppers a break — and to encourage more shopping. Statewide, the tax holiday would save residents a total of $3.3 million over the three-day weekend, according to a bill signed by the governor.
Twelve other states, including Georgia and Florida, have adopted tax holidays on back-to-school items.
There will be a series of meetings throughout July to explain to businesses how the back-to-school sales tax holiday will work. The nearest meeting is Wednesday from 8 a.m. to 9:30 a.m. at Huntsville/Madison County Chamber of Commerce at 225 Church St. For more information, call Carla Snellgrove at the Alabama Retail Association at (334) 242-1390 or Nancy King Davis at (334) 263-5757, ext. 101.
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Athens could lose $32,000 on back-to-school tax holiday
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