WASHINGTON – Back-to-school sales in Maryland have been better than last year, overcoming fears of a soft economy and competition from tax-free programs in neighboring jurisdictions, retailers say.
“We’ve definitely seen an improvement,” said Lynne Shostak, owner of Tammy’s Children’s Wear in Easton. Shostak estimated that she has had a 7 to 10 percent increase in sales compared to last year.
While hard numbers on the state’s back-to-school sales will not be available until sales tax receipts are disclosed in October, “anecdotal information from members indicates (back-to-school) sales are stronger this year,” said Maryland Retailers Association President Tom Saquella.
The rosier picture is in line with expectations nationally. The Washington-based National Retail Federation estimates the average family spent $483 on back-to-school items this year, an increase of $33, or 12.6 percent, from last year.
Marc Scher, owner of a Pocomoke-based bridal and children’s clothing store that bears his name, said he does not expect his back-to-school business to pick up until later in the fall. But he is not worried.
Scher said fears of flagging consumer spending and of locals spending their back-to-school dollars in tax-free zones such as Delaware and Washington, D.C., appear unfounded.
“It’s not really a concern,” said Scher when asked about customers going over the border to do tax-free shopping in Delaware. “We’re getting the same number of people we’ve had in the past, and sales have been about the same.”
Saquella said that few if any of his members seemed to think they were at a competitive disadvantage to jurisdictions like Washington, D.C., which lifted the sales tax for a week this summer on some school supplies and clothes. Maryland has offered such a tax break in the past but did not do so this year.
Retailers here were outraged last month when Maryland Comptroller William Donald Schaefer posted a notice on his Web site suggesting that cost-conscious residents consider the District’s tax-free back-to-school week for bargains. The notice provided a link to the D.C. Department of Revenue Web site.
Christine Duray, a spokeswoman for the comptroller’s office, said the notice was posted “because a number of consumers had called to clarify whether the program would be in place this year.” She said the notice was kept in place but the link was removed after it was deemed “controversial.”
Maryland’s first and only tax-free back-to-school shopping period was in 2001, when purchases of less than $100 were exempt from the state’s 5 percent sales tax for one week in August. Local merchants said they saw a marked spike in spending as a result of the program.
“Even though (the sales tax) was a small percentage of their overall spending, it produced a tremendous turnout,” said Mark Bowers, manager of The Gap Kids in Waldorf.
Bower, like others interviewed, hopes the state will bring back the program.
Maryland lawmakers for the last two years have rejected bills to renew the tax-free week. The retailers association did not throw its weight behind the 2002 and 2003 bills in light of the state’s budget deficit, but Saquella said that may change next year.
“The (fiscal) situation’s improved, but we’ll wait till January to make a decision on whether to push a bill in 2005,” he said.
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