JAY REEVES
Associated Press
HOOVER, Ala. - Alabama's
first sales tax holiday was like Christmas for state retailers, with
more than 60 percent reporting a jump in sales during the long weekend,
according to a survey released Thursday.
Gov. Bob Riley said the initial numbers show the sales promotion was
a success, and he and other leaders already are pushing for an expanded
version next year.
A survey of 186 retailers statewide showed that 64 percent reported
an increase in sales over last year during the tax-free weekend held
Aug. 4-6, said Mickey Gee, a retailing professor at the University of
Alabama at Birmingham.
Another 9 percent of stores said sales were flat, Gee said, and 24
percent indicated sales were the same or lower than last year. About
half the businesses surveyed, 49 percent, promoted the tax holiday
through advertising or sales.
The survey found that 68 percent of retailers reported an increase
in sales of as much as 50 percent, and 20 percent said sales more than
doubled. The rest fell somewhere in between.
Riley called the sales tax holiday a success even though state sales
taxes are collected one month in arrears and the impact on the state
budget won't be known for at least a month.
"I cannot imagine that we would not have it next year," Riley said
during a news conference at the Riverchase Galleria in suburban
Birmingham. "We have proven this can be beneficial to everyone in the
state."
The law creating the sales tax holiday got pushed through the
Legislature by Rep. Mac Gipson, R-Prattville, and Sen. Zeb Little,
D-Cullman.
The state waived its 4 percent sales tax the weekend before many
schools returned to class, and more than 200 cities and counties did
the same with local sales taxes for back-to-school clothes and
supplies. Riley said more local governments should participate next
year.
"It looked like Christmas here at the Galleria that weekend," said
Mayor Tony Petelos of Hoover, which dropped its 3 percent sales tax
during the holiday.
State Revenue Commissioner Tom Surtees said it appeared that
increased sales of items that were still taxed made up for the loss of
tax revenues on items that weren't taxed during the weekend.
Studies show that Alabama's sales tax revenues are increasing at
about 8 percent annually, he said, and the temporary tax break
shouldn't affect that rate.
"This holiday won't make that number drop down," said Surtees. "I'm
thinking you're going to look at our revenues and not know we had a tax
holiday."
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