- Associated Press - Friday, August 5, 2016

COLUMBIA, S.C. (AP) - South Carolina is among 12 states offering shoppers a sales tax break this weekend, but many tax experts contend it is a gimmick that does not boost the overall economy.

The sales-tax holiday - which began at 12:01 a.m. Friday and extends to midnight Sunday - shaves state and local sales taxes from clothes, computers and other school-related items.

That means shoppers will save up to 8.5 percent on purchases, depending on local taxes. The state sales tax rate is 6 percent.

Statewide, the three-day break is expected to reduce revenue to South Carolina’s coffers by $2.25 million, according to the Board of Economic Advisors.

The Federation of Tax Administrators says 17 states offer tax-free holidays this year, 12 of them this weekend. South Carolina’s began in 2000. Neighboring Georgia’s back-to-school tax holiday was last weekend.

Business groups praise the sales-tax break.

Ben Homeyer, state director of the National Federation of Independent Business, said it could provide small stores a much-needed lift. In addition to reaching parents shopping for their children, the tax holiday could also bring cash-strapped shoppers into stores for deals on non-school items, he said.

“It’s been a ho-hum summer for a lot of small businesses,” he said. “The sales-tax holiday should help people get fired up and in the mood to spend.”

The nonprofit Tax Foundation contends that the pennies-per-dollar saved are not enough to spur additional sales. Rather, shoppers shift the timing of purchases they would make anyway. In addition, many retailers raise prices during the holiday, reducing any savings, the foundation said in its latest report titled “Sales Tax Holidays: Politically Expedient but Poor Tax Policy,” issued last month.

While the weekend is touted as offering savings on back-to-school clothes and supplies, the list of exempt items can be confounding. For example, backpacks for school are tax-free, but backpacks for hiking aren’t. Daily planners and organizers are exempt, but only if they’ll be used by schoolchildren. The break applies to computer tablets, such as iPads, but not to devices used primarily for music or reading, such as iPods or Kindles.

Wedding dresses, diapers and hunting vests are tax-exempt. But cellphones, watches and sports equipment are not. Neither are glasses of any kind - including prescription glasses.

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