- The Washington Times - Friday, August 10, 2001

Maryland retailers are gearing up for a potential onslaught of business, thanks to the state's first tax-free holiday, which begins today.
Shoppers will get a break from Maryland's 5 percent sales tax on all clothing and footwear priced at less than $100 through Aug. 16.
"We're hoping between this tax-free week and the tax rebate it'll be a nice kick-start to retail sales," said Thomas Saquella, president of the Maryland Retailers Association. "It's no secret that sales have not been what retailers would have liked the first two quarters."
While consumer spending has slowed this year, retail sales continue to increase, but not at the same rate as in past years.
Sales of general merchandise, apparel, furniture and home furnishings are expected to increase about 3.2 percent this year, compared with a 6.8 percent increase in 2000, according to the National Retail Federation.
Maryland retailers could expect as much as $150 million in gross sales over the seven-day shopping period.
Mr. Saquella said Maryland merchants likely will make out big this week because shoppers will be more willing to spend.
"They'll save their $10 or $15 and go spend it somewhere else," he said. "This will serve as a great boost and generate traffic."
Maryland is one of several areas throughout the country including the District that have enacted a tax-free week.
Beginning Aug. 3, the District eliminated its 5.75 percent sales tax on clothing, shoes and school supplies that cost less than $101.
District officials say the tax-free holiday, which continues through Sunday, is expected to be a boon for city retailers who lose much of their business to the Maryland and Virginia suburbs.
The Hecht's store at Metro Center had "double-digit increases" in sales over the first weekend, said spokeswoman Diane Daly.
"It's been a great success," she said. "We're hoping for the same in Maryland."
Maryland shops tend to lose business to neighboring states like Pennsylvania, which does not tax clothing, and Delaware, which does not have any sales tax. Virginia, which also loses business to neighboring states, does not have a tax-free holiday.
Maryland retailers and shopping centers have been doing all they can to get the word out about the weeklong tax break, from advertisements and in-store marketing to coinciding promotions and sales.
Marley Station in Glen Burnie is offering a 10 percent rebate on all purchases at the shopping center today. Shoppers can bring all their receipts from today's purchases up to $1,000 and receive 10 percent back in a Marley Station gift certificate.
"We're anticipating that we'll see heavy traffic," said Charmaine Crismond, general manager of Marley Station, which is extending its hours on the weekend to accommodate any increases in shoppers.
Westfield Shoppingtowns Annapolis, Wheaton and Montgomery are handing out coupon books beginning today with such offers as 20 percent off a purchase at Children's Place or $10 off a purchase of $50 or more at Foot Locker.
"We wanted to enhance the [tax-free week] offer even more," said Beth Gallagher, regional marketing coordinator in the Westfield Shoppingtown's southeast region. "We wanted to up the ante and make more of an incentive for people to shop here."
The 40,000 coupon books will be good through Sept. 3.
Mr. Saquella said the tax-free week comes at a crucial time for retailers. The back-to-school season is a gauge of shoppers' spending habits.
"If they are spending this time of the year, then they're going to spend during the holidays," Mr. Saquella said.
The law suspending the sales tax for one week on clothing and shoes priced less than $100 was approved during the 2000 Maryland General Assembly session.
The state's comptroller's office expects sales tax revenues to drop by about $6 million during the week. The lost sales tax will be offset in part by the gains in income tax generated by increases in employer withholding taxes and other business-related revenue sources.
"Shop Maryland Week will help families save money on their back-to-school shopping while supporting local merchants," Maryland Comptroller William Donald Schaefer said in a statement. "It will put money in the pockets of Maryland consumers without creating a permanent reduction in revenues."
Retailers hope Maryland will follow the leads of other states and create an annual tax-free week, Mr. Saquella said.
New York became the first state to approve a tax-free holiday in 1996. The holiday is now a permanent part of the state's retail scene. Florida, Texas and South Carolina all have enacted sales-tax free holidays.

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