Alabama Governor Riley Promotes Sales Tax Holiday

Back-to-School savings, sales more critical than ever for families, businesses and government

August 04, 2009 -- HUNTSVILLE - As the 2009-2010 school year approaches, families in need of back-to-school clothing and supplies will again be able to take advantage of exceptional savings thanks to Alabama’s fourth annual Sales Tax Holiday.

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From 12:01 a.m. on Friday, August 7 until 12:00 midnight on Sunday, August 9, the state’s four percent sales tax will be waived for certain purchases such as clothing, school supplies, computer equipment and books. In addition to the state removing its sales tax, this year 253 cities and counties throughout the state will waive their local sales taxes, offering consumers even greater savings at the check-out aisle.

Governor Bob Riley said the tax-free weekend not only provides families with much-needed savings, it also gives a tremendous boost in sales to retailers now reeling from a worldwide recession. During a visit to a Huntsville Best Buy to promote the Sales Tax Holiday, Governor Riley said the annual tax-free weekend could not come at a better time for consumers, businesses and even government.

“Alabama’s Sales Tax Holiday provides a unique opportunity for families to save money, stores to boost sales and our state’s economy to get the shot-in-the-arm that it needs,” said Governor Riley. “It really is a ‘win’ economically for everyone and it comes at a critical time.”

Alabama’s Sales Tax Holiday has had a positive effect on state revenue, as sales tax collections for August have increased each of the three years since the event began. Sales tax collections in August 2008 were approximately 24 percent higher than in August 2005 before the Sales Tax Holiday existed.

“Some have this mentality that the only way for government to increase revenue is to raise taxes,” said Governor Riley. “That is absolutely not true, and the Sales Tax Holiday is the perfect example why. When you create an environment in which consumers begin to reengage and make purchases they otherwise wouldn’t have, it has a far-reaching stimulative effect. You do that by easing the tax burden, not increasing it.”

Governor Riley first called for a sales tax holiday during his State of the State Address in January 2006. The bill establishing Alabama’s annual Sales Tax Holiday passed with enthusiastic and bipartisan support, as well as the strong backing of the Alabama Retail Association.

Each of Alabama’s neighboring states has enacted a similar tax-free shopping period. However, only Tennessee will hold a sales tax holiday the same weekend as Alabama. Alabama Retail Association Chairman and Huntsville businessman Darrell Bourne said that should encourage out-of-state shoppers to come spend their money in Alabama stores. This year, Florida cancelled its sales tax holiday.

“Our friends in Florida, Mississippi and Georgia could all save by taking a day trip to participate in Alabama’s Sales Tax Holiday,” said Bourne. “The Alabama Retail Association encourages Alabamians as well as our neighbors in other states to take advantage of the savings available this weekend.”

Edwin Smith, general manager of the Best Buy in Huntsville’s University Plaza shopping center, said his store has planned their back-to-school sales to coincide with the Sales Tax Holiday.

The Sales Tax Holiday applies to the following items:

- clothing priced at $100 or less

- school supplies and textbooks priced at $50 or less

- other books priced at $30 or less

- computers and computer equipment priced at $750 or less

For detailed information on Alabama’s Sales Tax Holiday, including a list of participating local governments, visit the Alabama Department of Revenue’s website at

http://www.revenue.alabama.gov/salestax/SalesTaxHol.htm.

Source: Alabama Governor