Tax Free Weekend But Not In South Dakota
August 1, 2008, 5:04 PM
With shoppers hitting the store to find wedding gifts, birthday presents and back-to-school clothes, South Dakota retailers are getting busy -- but not as busy as those in other states.
17 states in the U.S. are deeming this weekend a tax-free holiday, making certain items purchased exempt from sales tax. But while the other states are enjoying the break, South Dakotans will still be paying the sales tax.
The idea behind a tax-free holiday is to muster up some big business for retailers and give the consumer a tax break on certain purchases. The bill to do that in South Dakota failed during last year's legislative session.
Christy Benson is a resident and shopper in Sioux Falls in favor of a tax-free weekend.
"I would definitely do it. I've never heard of it but I think it would definitely help with before school," Benson said. "Everybody's out buying stuff. I think that would be a great idea."
The bill may have failed because eliminating a sales tax would require revenue from somewhere else, since South Dakota does not require an income or corporate tax.
But many shoppers say a tax-free weekend is just what consumers need.
"I'm a coupon clipper," says Benson. "I look around and I go to sales and I have three kids in school and prices matter, they do."
On the other hand, though retailers may enjoy all the extra business, they might not benefit from it as much as you'd think.
Dan Statema is the Executive Director with Downtown Sioux Falls and says "I don't know it would make a huge difference. It might be burdensome with paper work."
Each retailer would be required to keep track of which items they sell that are and are not tax free. And while large retailers have computer systems to do all that work, smaller retailers would need to do more record keeping.
"I can see it working better for some businesses over others," says Statema.
But while a tax-free-weekend may not be in the works for South Dakota yet, that doesn't mean it won't happen in the future.
That sales tax in South Dakota is at 5.9 percent meaning a $300 purchase would save you just under $18.
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