Tax holiday can help small businesses
Local governments could feel loss of revenue
Georgia’s upcoming sales tax holiday on clothing, computers, and school supplies could provide a muchneeded lift to many small stores and businesses, said Nathan Humphrey, state director of the National Federation of Independent Business. The sales tax holiday is July 30-31.
“It’s been a lackluster summer for a lot of small businesses,” he said. “The sales-tax holiday should help people get fired up and in the mood to spend.”
Yet some question whether these oncea-year events are not so good due to their resulting in less tax revenue going into government coffers?
The latest NFIB Small Business Optimism Index, released July 12, shows that small-business confidence improved by only a fraction of one percent in June.
“Small businesses are in maintenance mode,” said NFIB Chief Economist Bill Dunkelberg. “Uncertainty is high, expectations for better business conditions are low, and future business investments look weak.”
That’s where the sales-tax holiday comes in, Humphrey said. Parents would go back-toschool shopping regardless, he said, but the tax holiday could also attract cash-strapped shoppers who have delayed buying new clothes and devices.
“And people need to remember that the tax holiday applies to Main Street as well as the mall,” he said. “Even if you don’t need school clothes, you can save money shopping during the sales-tax holiday, and you can find some great deals and unique merchandise by shopping small.
“When you shop at small, locally-owned businesses, you’re helping your friends and neighbors,” Humphrey said. “You’re supporting the businesses that support our schools and charities and create jobs in our communities.
“Combined with the back-to-school sales a lot of stores are having, the sales-tax holiday is going to help people get a bigger bang for their buck,” Humphrey said. “The more we can do to encourage people to shop at small businesses, the more jobs we’ll save, and the faster our economy will grow.”
But is lost revenue tax revenue offset by families buying taxed goods at the same time they are picking up necessary back-to-school items?
“It’s always bad for us,” said Walker County Finance Officer Greg McConnell.
Though bad, he said the overall effect is slight because “we really only have the one Walmart in LaFayette. Most people from here go to Catoosa County or Chattanooga to shop.”
For Catoosa County, where big-box stores and national chain stores abound, the loss of tax revenue is greater.
Carl Henson, chief financial officer for Catoosa, said the twoday tax free holiday resulted in a total loss of about $20,000 in local option (LOST) and special purpose local option (SPLOST) tax collections.