Last week, Frilly Frocks and Pollywogs children’s clothing and furniture owner Rebecca Caselow got a letter in the mail from the Virginia Department of Taxation, informing the small business owner about a sales tax holiday. She immediately called her accountant.
"That was the first I’d heard of the sales tax holiday," Caselow said. "I’m not sure what to expect."
Earlier this year, the Virginia General Assembly unanimously approved a Sales Tax Holiday scheduled for the first full weekend in August, to help families with children in school and help boost the retail economy in general.
A Sales Tax Holiday is a temporary period of time when business owners and customers are exempt from collecting or paying sales tax on specific purchases. In this case, customers are exempt from paying sales tax on back-to-school supplies less than $20 per item and clothing and sneakers less than $100 per clothing or pair.
Virginia Department of Taxation spokesperson Samantha Pinner said all Virginia businesses that sell back-to-school items, such as T-shirts, binders and pencils, are required to participate in the holiday.
"All stores that sell the approved items, no matter if you’re a big chain or a ‘Joe and Jan’s’ clothing store, have to participate," she said.
CASELOW, who opened her small Ashburn store one year ago, is busy preparing for back-to-school shopping. Like most children’s store owners, Caselow said the month of August and early September is her busiest time of year.
This year, the Sales Tax Holiday will begin at 12:01 a.m., Friday, Aug. 4, and end at midnight, Sunday, Aug. 6.
"I’m not really sure how to handle this holiday," she said.
Caselow said she does not plan to do any additional advertising for the holiday, but expects more customers will come in to take advantage of the tax break.
"I don’t know what to expect, but I hope it’s a good thing," she said.
Supervisor Eugene Delgaudio (R-Sterling) urges citizens and county stores to participate in the event.
"This could save many thousands of dollars to taxpayers, result in business revenue early to Loudoun companies and generally improve the general welfare of the community," he said. "Just walk in a store. It’s not that complicated."
TO MAKE things easy, the Virginia Department of Taxation created a list of approved items exempt from sales tax.
The list not only includes back-to-school items such as blackboard chalk, book bags, watercolors and writing pads, but clothing and footwear under $100.
The approved clothing list includes bathing suits, gym clothes, jerseys, jeans, ear muffs and tights. It also includes children and adult diapers, aprons, lab coats, uniforms and wedding apparel.
Clothing doesn’t include clothing accessories, sporting equipment or protective equipment, Pinner said.
For example, sporting equipment, such as ballet and tap shoes, mouth guards, roller and ice skates, ski boots and watersuits are not exempt from sales tax during the holiday. Clothing accessories, such as hair bows, handbags, sunglasses and watches will be taxed.
WHILE OTHER stores aren’t required to participate in the weekend event, business owners may opt to absorb the sales tax.
"Absorbing sales tax is normally illegal in Virginia, but the Department of Taxation is allowing it that weekend," Pinner said. "They are allowed to advertise 14 days prior to the holiday."
If retailers choose to absorb the tax, they must pay it back to the Department of Taxation.