South Carolina’s annual sales tax-free weekend starts Friday, but North Carolina retailers are taking extra steps to lure shoppers who might otherwise be tempted to shop south of the border.
This is the second year North Carolina won’t have its own sales tax holiday, which previously occurred the first weekend of August. Like South Carolina’s holiday, the tax-free weekend offered shoppers relief on back-to-school items like clothing and laptops.
Retailers in North Carolina say the promotions they’re planning throughout the weekend could save shoppers more than the S.C. sales tax holiday, which saves customers the 6 percent state sales tax and any local taxes. In York County, which borders Mecklenburg, the total sales tax is 7 percent.
Christie Burris, senior director of communications at the N.C. Retail Merchants Association, said based on what her team heard from member retailers, it’s clear that plenty of North Carolina customers shopped in South Carolina for a better back-to-school deal last year. Offering discounts and other promotions this weekend, she said, is a reaction to last year’s slowdown.
“The more (retailers) focus on their community and store specials in their community, it’s going to keep the money earned in North Carolina to be spent in North Carolina,” Burris said.
For the second year in a row, Concord Mills will host a “better than tax free” sale this weekend. Almost 50 participating retailers, including J. Crew and Banana Republic factory stores, will offer an additional 15 percent off.
Nan Gray, director of marketing and business development for the outlet mall, came up with the idea for the sale last year when she realized neighboring states like Virginia and South Carolina would still have the tax holiday. It was “a lot of work,” she said, and included asking retailers’ regional and corporate offices for permission to participate.
“We don’t release sales numbers, but all of the retailers who reported in were very happy. They started asking way back in March are we doing it again this year,” Gray said.
Charlotte Premium Outlets, which opened in July last year, has a 15 percent off mall-wide sale this weekend.
Belk is hosting a “Biggest Back to School Sale,” which includes $10 off $40, $25 off $100 and $40 off $150 purchases, plus door busters, limited time offers on Friday and Saturday, and an early bird sale Saturday.
Sales took a hit last year
Education Express, which sells school supplies and has stores in Concord, Winston Salem and Gaffney, S.C., saw its North Carolina stores take a sales hit when the state’s tax holiday was discontinued, said Morgan Womick, the retailer’s regional sales manager.
So this year, Education Express is offering 10 percent off all purchases at its North Carolina stores from Friday through Sunday. Womick called back-to-school shopping the retailer’s own Christmas since it’s the busiest time of year, and teachers make up the bulk of its customer base.
“We want to do something to increase our foot traffic, and we also want to do something to honor those who are getting ready for the school year ahead of us,” Womick said.
North Carolina did away with its sales tax holiday when Gov. Pat McCrory signed legislation in 2013 that also reduced corporate and personal income taxes. The N.C. Department of Revenue estimates that the tax holiday cost the state about $13.4 million in lost revenue in 2013.
Steven Cox, a marketing professor with Queens University of Charlotte, questions whether N.C. shoppers will think it’s worth it to drive south to save a few dollars, unless they live right at the border.
“If you look at it from an effort-to-reward basis, you have to be buying significant amounts of product to make it worthwhile on an economic basis,” Cox said.
South Carolina’s Department of Revenue estimates that the sales tax holiday saves taxpayers between $2 million and $3 million a year. Those savings are enough of an incentive at the Rock Hill Galleria, which considered some sort of shopper incentive program but ultimately decided against it.
“There’s not a lot more we need to do to incentivize shoppers this weekend. It’s already there with the tax-free holiday,” said Glenn Miller, the galleria’s managing agent, adding that retailers including JCPenney, American Eagle and Rue 21 all reported a “significant increase” in shopper traffic and sales last year compared with the year before.
About the SC tax holiday
The sales holiday in South Carolina lasts this weekend from 12:01 a.m. Friday until midnight the following Sunday. The state’s 6 percent sales and use tax, plus any applicable local sales tax, will not be applied to the following items:
▪ Clothing accessories including hats, scarves and purses
▪ School supplies including pens, notebooks and backpacks
▪ Computers, computer software, printers and printer supplies
▪ Bath towels, shower curtains and bath rugs
▪ Bed linens, comforter sets, pillows and pillow cases
Shoppers can find additional information on the South Carolina Department of Revenue website.