News

Sales Tax Holiday this weekend

By David Hotle, The JOURNAL


 


On Friday and Saturday, Iowans will see a 6 percent discount on their purchases of clothing and footwear as Iowa celebrates its 18th annual Sales Tax holiday.


Iowa is one of 10 states in the U.S. in which the government won?t get its share of sales, giving millions of families with school-bound children the chance to save on items coming in at less than $100. According to state code every business that is open on Friday and Saturday must participate in the holiday. The removal of sales tax, including local-option sales tax, only extends to clothing items under $100. The holiday does not include Sunday.


?It?s a great opportunity for parents to get out and get their kids outfitted for school and save 6 percent,? Main Street Washington director Sarah Grunewaldt said. ?Clothing and footwear are generally exempt from sales tax but the exemption extends it to sporting goods and other pieces that sales tax would otherwise be charged for. It is an all-around good weekend to get out and spend some money locally.?


Grunewaldt does not know of any additional specials that will be offered in conjunction with the holiday. She said Main Street does not regularly make a big event of the holiday.


The Iowa Legislature launched the holiday in 2000 as a way of benefiting families with a lower-than-average income to help them with back-to-school shopping. The National Retail Foundation says the average family with children getting ready to go back to school will spend $600 for supplies.


The Main Street Washington area, which covers the downtown area including the square, has about 15 clothing and retail shops.


?When you shop locally, no matter where you spend your dollars, your dollars work for your community,? Grunewaldt said. ?Those businesses are the ones supporting organizations in the community.?


She said when a dollar is spent locally, about 65 cents of that dollar stays in the community. Out-of-town sales result in less for the community.


According to numbers recently released by Main Street Iowa, Washington has about $168 million in retail trade, but this includes such things as groceries and sporting goods. According to other data people in Washington are spending more than $30 million more than the state norm locally.


?Not paying sales tax also means the local municipalities don?t get the little bit of tax that goes back to the schools or cities that helps support their functions,? Grunewaldt said. ?It doesn?t help the police department. it doesn?t help the fire department. Sales tax is a good thing, it helps support your community. Having a weekend off sales tax is a good thing too.?