South Carolina’s back-to-school sales tax holiday runs Aug. 6-8

(The Center Square) – Coming up on the first weekend in August, from Aug. 6-8, South Carolina will again hold its tax free holiday on back-to-school items, from clothing to footwear to school supplies, computers for school and some bed and bath items.

The tax free weekend has run since 2000 and has plenty of specific requirements, such as a computer and accessories that are sold as a package are tax free but a computer for a business or computer accessories such as a mouse that are sold separately are subject to South Carolina’s 6% state sales tax along with any local sales and use tax.

South Carolina is one of 17 states that will have sales tax holidays this year, compared to a high of 19 in 2010. Sales tax holidays like the one in South Carolina are set up to give consumers a break as they prepare for the new school year.

But a Tax Foundation study refutes that they lead to any additional purchases.

“The evidence shows that, instead of increasing purchases, consumers simply shift the timing of purchases they were already going to make. For most who shop during sales tax holidays, the exemptions simply provide a modest and unexpected benefit for doing something they would have done anyway,” the report concluded.

Regardless of the impact on the state’s sales data, the Tax Foundation report does state that it is clear the holidays have large political support.

“Despite their political popularity, sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform,” the report stated, using data from the Federal Reserve. “Sales tax holidays introduce unjustifiable government distortions into the economy without providing any significant boost to the economy.”

The Tax Foundation report says that they impact different income groups in specific ways. The report also added that politicians claim the holidays give tax relief.

“This, too, is overstated,” the report concluded. “While sales taxes are somewhat regressive, this fact does not make sales tax holidays effective for providing relief to low-income individuals. To give small tax savings to those with lower incomes, holidays give large savings to higher-income groups as well.”

Each year, South Carolina posts a set of frequently asked questions about the rules of the sales tax holiday and which examples are and are not exempt.

Most new clothing purchases, for example, are exempt from taxes while watches, glasses, jewelry, cell phones and accessories and clothing rentals are not exempt.

Most shoes are also exempt but bowling shoe rentals, work shoes provided by employers and items that were placed on layaway are not exempt.

Backpacks are exempt but backpacks for camping are not. School supplies are exempt but workplace supplies, in many cases, are not. Printers, ink, paper and toners are exempt but scanners and e-readers are not.

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