BIRMINGHAM, Ala. - The annual Alabama back-to-school, sales-tax holiday Aug. 7-9 should generate improved sales for the state's retailers, according to experts in the University of Alabama at Birmingham (UAB) School of Business.
Mickey Gee, M.A., an executive-in-residence instructor of marketing and former owner of a Birmingham-based retail chain, said the Alabama sales-tax holiday applies to purchases consumers make at every store in the state on these three days.
"There is some confusion this year because some major municipal governments like Jefferson County have chosen not to participate, but that only affects local tax collections," Gee said.
"No matter what a local government has decided to do, the 4 percent state sales tax will not be applied to exempt items during the tax-holiday weekend, which means savings for everyone. If a local or county government has chosen to participate, that will mean local tax savings in addition to the state-tax break," Gee said.
Bob Robicheaux, Ph.D., chair of the Department of Marketing, Industrial Distribution and Economics, said the tax holiday could provide a lift for state retailers who have suffered through months of lessened consumer confidence and a slumping economy.
"While it is unlikely that we will improve on sales numbers when compared to August 2008, the tax holiday certainly will improve the month-to-month sales numbers from July to August of this year," Robicheaux said. "The downturn of the past 10 months has created a lot of pent-up consumer demand, so there should be an easing of the pocketbooks because children grow and need new school clothes and other items."
In addition, Gee said that retailers should be offering the most value for consumers since the economic nosedive in fall 2008. Retailers have had more than 10 months to squeeze the fat out of their supply chains and offer the best prices for the most desired products without having to mark items down to fire-sale prices, Gee said.
"Items for sale earlier this year had been purchased well in advance of the economic slide and didn't reflect changing consumer tastes," Gee said. "Now, stores have had a period of months to work closely with suppliers and stock new merchandise that offers value, which is what consumers who have tightened their belts are looking for right now."
About UAB
The UAB School of Business is located in the heart of Alabama's largest city and business center. For more information on how the school's Birmingham location provides unique internship and other out-of-the-classroom experiences, log on to http://www.uab.edu/business/.