Kerri Palmer planned to spend $200 out of pocket on teaching supplies before the school year begins in August. Her plans changed this week.
Throughout the school year, all 800 or so students at the Gainesville Exploration Academy will pass through Palmer’s schoolwide classroom to learn about science, technology, engineering, art and mathematics.
As a result, her classroom supplies run from pencils and notebooks for bookwork to Alka Seltzer and sugar for science experiments.
Last year and years before, she’s purchased most of her extra supplies during Georgia’s tax-free holiday in late summer. But this year the state is going without the back-to-school tax holiday for the first time since 2010.
Georgia levies a 4 percent statewide sales tax.
State lawmakers didn’t pass legislation during their 2017 session establishing the late-July tax holiday amid criticism that the holiday cost state government $70 million in tax revenue. Critics also argued that the holiday was ineffective at best and bad for both taxpayers and the state at worst. Tax holidays have also been criticized nationwide as “corporate welfare” for retailers.
However, sales tax holidays remain popular as a tax break and holidays are still in place next month in bordering South Carolina and Alabama.
Palmer learned on Tuesday that the tax holiday would not happen this year.
“Not only is it helpful for the classroom, but we have children as well,” Palmer said. “Here we are spending money out of pocket for our classrooms, but we have children that we have get clothing (for and) other things.
“It’s kicking into our finances by not having the tax-free weekend.”
At the Best Buy on Dawsonville Highway, general manager Adam Dutton said the tax holiday has “always been big” for the Gainesville electronics store.
However, in his five years managing the location and 15 years with Best Buy, he’s seen conventional holidays — Independence Day, Christmas, Thanksgiving and even Earth Day — more reliable bring customers to his store than the state’s tax holidays.
Fassil Fanta, an economics professor at Brenau University, summarized the debate over the tax holiday in this way: Lawmakers argue they could spend that $70 million in revenue on public schools, transportation or rural hospitals, a few segments of public services that affect low-income families. Meanwhile, critics of the holiday believe consumers will buy school supplies both large and small regardless of the tax holiday.
“They argue that they’re buying those things no matter what the policies (do), and there’s no boost in the local economy, there’s only a shift,” Fanta said. “People are waiting for this opportunity and buy more at that specific period, so if you look at all levels of sales they say we won’t see any change.”
Dutton said much the same.
“With the holiday or not, people need laptops. They need printers. If I’m a new student moving into an apartment, I’m going to need a router,” he said. “Those are things that I’m going to have to have regardless of whether there’s a tax free day or not.”
Without the tax holiday, Dutton said he’s guessing people will do their back-to-school shopping over a month instead of one weekend, but that the amount they’re spending won’t have broad changes.
Meanwhile, supporters of the tax break argue that tax holidays give direct benefits to families.
“Sales tax holiday in most cases coincide with the time period where households are spending a huge amount of money on necessities,” Fanta said. “That’s a good thing in the sense that low-income families where a large portion of their income is going to necessities benefit the most.”
The six-year economics professor came down on the side of the holiday’s supporters, saying it empowers individual families.
“Due to a really slow recovery in our economy, I think households take any advantage of any dollar which is available for them,” Fanta said. “You have to think about it: Do you allow consumers to invest where they need it the most and they know the best, or are you thinking about lawmakers know the best where that money should go?”
In the 2016 back-to-school tax holiday, clothing was tax exempt if it cost less than $100 an item, according to the Georgia Department of Revenue’s 2016 list. Computers and components costing less than $1,000 were exempt. School supplies costing less than $20 were exempt.
Tax free holidays in Georgia applied to more than just school supplies. A second tax free weekend had been organized in recent years for big-ticket items, including energy-efficient appliances with price tags of up to $1,500.
Neither holiday will take place this year, and retailers in Gainesville are waiting to see how that affects their third and fourth quarters.
“We’re not 100 percent sure what to expect this year,” Dutton said, still sounding optimistic. “It’s a big event, and we’re not going to have it this year.”