The 2013 Louisiana Annual Sales Tax Holiday will return just in time for the dreaded season of school supply shopping, but the savings may not be as large as they seem.
On Friday and Saturday, most retail purchases will be exempt from the four percent state sales tax.
While the tax holiday may seem like a great opportunity to save money, that may not actually be the case.
University Professor of economics and public policy James Richardson said the tax holiday will not make much of an impact on the economy or anyone’s bank account.
“For the most part, it’s not economic stimulation at all; it’s just altering the timing of the purchasing,” Richardson said. “It’s a government tool, and its major impact is forcing retailers to change the cash registers for a few days.”
When asked if the tax holidays help shoppers in any significant way, Richardson simply added, “Not really. It just reduces the cost by four percent, and that’s it.”
Statute 47:305.54 of the Annual Louisiana Sales Tax Holidays Act was enacted in 2005 by the state legislature. “The sales tax holiday takes place every year as a matter of law,” said Louisiana Department of Revenue Press Secretary Byron Henderson. “It was created by the Louisiana State Legislature and the Department of Revenue simply administers the provisions of the statute.”
The tax holiday only applies to the four percent state sales tax and will not apply to all local sales taxes.
According to a news release by the Louisiana Department of Revenue, local sales taxes will still apply during the holiday, unless “the local taxing authority provides its own exemption.” East Baton Rouge parish shoppers will still have to pay the local sales tax of five percent.
The tax holiday applies to purchases of “tangible personal property,” with a few conditions: Buyers must buy and accept delivery of an eligible item, place it on layaway or acquire it if it was previously on layaway. Also, the exemption will only be applied for the first $2,500 of the purchase.
The break will not apply to vehicles that need to be licensed and titled, food made to go, anything leased or rented, admission to recreational events or services such as hotel occupancy, laundry and printing.
The Louisiana Department of Revenue reminds shoppers on its website to keep their receipts for school-related purchases, which may be eligible for tax deductions.
For more information about the 2013 Louisiana Annual Sales Tax Holiday, visit the Louisiana Department of Revenue website at revenue.louisiana.gov.