Neighboring sales tax holidays might affect S.C.

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Posted 8:06AM on Monday, July 22, 2002

COLUMBIA, S.C. - South Carolina retailers along the state's borders will see fewer purchases during the sales tax holiday this year because North Carolina and Georgia are holding a similar break the same weekend, analysts say. But South Carolina's package is broader and does not have price caps on certain items like Georgia and North Carolina, state Merchants Association president Jim Hatchell said. Still, businesses are preparing for less demand. "It's really going to kill sales in Rock Hill," said Maxine Huntley, a manager with clothing store Fashion Bug in Rock Hill, which sits close to the North Carolina border. "Last year during the tax holiday, this store got shoppers from Charlotte, Concord and all over North Carolina, and we had sales of $15,000 on Saturday alone, where normally we would do $4,000 to $5,000 of business," she said. This will be North Carolina's first sales tax holiday, Georgia's second and South Carolina's third. During Georgia's break in March, people from South Carolina headed south for the sales. "We actually had people going from Aiken down to Augusta, to our other store, to make purchases," said Chuck Brown, manager of Computer Exchange in Aiken. Even without competing tax holidays, South Carolina store owners would have seen business drop, said Deborah Fowler, director of the Center for Retailing at the University of South Carolina. "There's a nationwide trend that shows sales during the tax-free holidays decrease each year," she said. "For example, the first year people went out and bought computers, but most families don't buy computers every year, so sales tend to decline." Consumers saved $3.6 million in sales tax in 2000 and $2.7 million last year, according to the state Revenue Department. It's impossible to know how many shoppers came to South Carolina from North Carolina and Georgia the last two years, but the number was sizable, Fowler said. "Driving from Augusta to North Augusta or from Charlotte to Rock Hill was no big deal," she said. "But now, with North Carolina and Georgia doing it as well, there's no reason for people to cross the border." Hatchell said in Georgia and North Carolina, clothing items and footwear costing more than $100 are not sales-tax exempt. Georgia will not tax the first $1,500 of the sales price of a personal computer and related items while North Carolina exempts the first $3,500 during the holiday.