- The Washington Times - Saturday, August 11, 2001

Merchants and shoppers took fervent delight yesterday at the start of Maryland's first-ever tax-free holiday.
Comparisons to Delaware's tax-free haven abounded, as malls filled up with folks looking to save 5 percent on a new pair of shoes, slacks or an outfit for the baby. Clothing and shoes priced under $100 are tax-free until Aug. 16.
Bethesda resident Maryanne Dawson took advantage of the tax-free holiday by buying birthday presents for her daughter yesterday afternoon. She carried an armload of potential purchases through Sears in the Westfield Shoppingtown in Rockville.
"They can advertise 5 percent off, but when they say 'tax-free,' well, that's different." Mrs. Dawson said. Maryland retailers were cautious about the possible effect of the tax holiday on business.
"I think it's a little too early to know or say anything, since it's the first day," Nordstrom spokeswoman Nancy Miyahara said.
Arundel Mills spokesmen said they witnessed what appeared to be a 15 percent increase in foot traffic during the day.
Indoor malls seemed busy, but officials said that's been the case all week, as people have shopped to escape the heat. This weekend is expected to bring the biggest increase in traffic, officials said.
"It's unknown how it's going to be received," said Louise Gordon, associate marketing director for Westfield Shoppingtown. "We expect later in the evening it will get busy. The retailers are all geared up."
Retailers said early signs were positive, but hard figures were unavailable. The District wraps up its tax-free holiday — which meant a temporary elimination of its 5.75 percent tax on clothing, shoes and school supplies — this weekend. Retailers said they saw double-digit increases in sales as a result.
"We were happy with what we saw this week in D.C.," said Hecht's spokeswoman Diane Daly. "We don't see any reason why it wouldn't carry over."
Most shopping centers had extended hours and were holding additional promotions. Centers have issued coupons for savings on products such as jewelry and sunglasses that aren't tax-free. Marley Station in Glen Burnie issued 10 percent rebate coupons on all purchases yesterday, and Westfield Shoppingtown began issuing 40,000 coupon books, which will be good until Sept. 3.
The timing of the tax-free holiday has won praise because of its proximity to the back-to-school season and the arrival of new clothing lines.
Maryland's tax-free holiday, dubbed by the state as Shop Maryland Week, was approved during the 2000 session of the General Assembly. The state is expected to lose about $6 million in tax revenues during the week, money that is expected to be recouped by gains in income tax generated by increases in employer withholding taxes and other business-related revenue sources.
Florida, Texas, South Carolina and New York all have similar tax-free holidays. Delaware boasts tax-free shopping year-round. Pennsylvania has no tax on clothing.
Comparisons to Delaware abounded — shoppers interviewed yesterday said they would support the idea of Maryland becoming a tax-free state.
"I go to Delaware and Rehoboth Beach and the outlets there," said Olney resident Gloria Stephens, as she sifted through racks of clothes at Sears. "With sales, and without tax, [Maryland] could be competitive with the outlets." Legislators have discussed a reduction in overall sales tax, or an elimination of taxes on clothing. Shoppers said the Delaware model would go over well.
"I kind of like it in Delaware, where there's no tax at all," Mrs. Dawson said. "But I seldom get up there."

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