Storm supplies get tax break

RICHMOND (AP) — Virginians already have been excused from paying sales taxes on back-to-school supplies and energy-saving appliances.

Now it’s hurricane-preparedness supplies.

The state’s first Hurricane Preparedness Sales Tax Holiday begins Sunday and continues through May 31. During that week, sales tax will not be collected on generators costing $1,000 or less, or on nearly two dozen other items ranging from flashlights to duct tape.

State officials hope the 5 percent savings will encourage shoppers to stock up on items they would need if the state gets slammed by another storm akin to Hurricane Isabel, which in 2003 left about 1.8 million Virginians without power, some for weeks.

“As we’ve seen time and again, including recently with several tornadoes hitting the state, weather can be very unpredictable and end up causing a lot of damage and hardship,” said Tax Commissioner Janie E. Bowen. “Virginians should seriously consider equipping themselves for the upcoming hurricane season, and saving the 5 percent in the process is an added bonus.”

The Atlantic hurricane season begins June 1.

The General Assembly approved the tax break in 2007, based on a similar initiative in Florida for three years. Florida lawmakers, facing a $5 billion budget shortfall, did not reauthorize the tax break for 2008, leaving Virginia and Louisiana as the only states this year with a sales-tax exemption on hurricane-preparedness supplies.

“The reason it’s so important, and the reason the state backed it for the three years, was that retailers can’t really respond the way consumers want them to in the three days before a hurricane hits,” said Rick McAllister, president of the Florida Retail Federation. “People are panicked and buying everything on the shelves.”

Retailers are going to sell the supplies one way or another, he said, and it’s best to do it when there’s less pressure on the supply side.

“To have a list that you can check and make sure you have everything you need in advance, before a hurricane is barreling down on you, just makes sense for everybody,” Mr. McAllister said.

Florida estimated the tax break reduced revenue by about $12 million a year. Tax officials expect the initiative to cost a little more than $2 million this year in Virginia, which has a shorter coastline and is less vulnerable to severe hurricanes than Florida. The cost is expected to gradually increase to $2.75 million by fiscal 2013.

Laurie Aldrich, president of the Virginia Retail Merchants Association, expects shoppers to embrace the sales-tax holiday. But she said it would be unrealistic to expect it to be as popular as the 3-year-old back-to-school sales-tax holiday, which gives Virginians a break on clothing and classroom supplies.

“Some of our members see 75 percent increases in sales during that weekend,” she said. “I don’t know that the level of awareness and hype has been here on this one like the back-to-school holiday.”

Karen Cobb, a spokeswoman for the Lowe’s chain, could not provide specific sales figures, but said the hurricane-preparedness tax break was popular in the home-improvement chain’s Florida stores.

“Having a tax-free holiday is a great incentive for customers who might be a little on the fence in deciding whether to prepare for hurricane season in advance,” she said.

Miss Cobb also said Lowe’s stores in Virginia’s coastal communities will have “hurricane islands” — displays grouping items needed to prepare for storms. Citing competitive reasons, she declined to say whether the company would absorb the sales tax on nonexempt merchandise, as the law allows.

If Florida’s experience is an indication, generators will be among the hottest-selling items.

“Those things just flew out of the stores in the first year,” Mr. McAllister said.

Joel Davison, spokesman for the Virginia Department of Taxation, said officials consulted with retailers to devise the list of items that would be exempt from taxation. Though the goal is hurricane preparedness, many of the items are good for year-round household use — including batteries, bottled water and cell-phone chargers.

Virginia also had its first sales-tax holiday on Energy Star appliances and products last fall.