It’s another great opportunity to reengage your customers and bring them back into the store.
To help retailers with the slow summer selling season, many states have sales-tax holidays that drive traffic into stores and help consumers save on back-to-school purchases. (See the list below for the 17 states participating this year.)
As a dance retailer, you’ll want to make the most of this shopping incentive by preparing your store operations for it and thinking about how you want to promote the event to your customers.
1. Get ready.
- Find out exactly which items in your state are tax-exempt. (New Mexico, for instance, has in the past exempted leotards from tax, but not legwarmers or tap shoes.) Make a note of the start time and end time of the tax-free days, and check whether the sales tax holiday applies to local tax, too. Items above $100 are often still taxed, but each state differs.
- Arrange to reprogram your POS system for the tax-free items you’ll be selling on those days. Familiarize yourself with tax procedures for refunds and exchanges.
2. Check your inventory.
- Are there best-selling items that are eligible to be tax-free that you’ll want to stock up on?
- Do you have the inventory you need if you want to plan special displays of tax-free items?
3. Let customers know.
- Customers may not be as aware of the tax-free days as they are of other holidays.You need to alert them that they’ll be getting a deal by coming into your store on these days.
- Leading up to the holiday, promote the #TaxFree days on social media.
4. Create a promotion and merchandising plan.
- For this holiday, you don’t need to reduce prices (and cut into your margins) to give your customers a deal; eliminating the sales tax has already done that.
- On the other hand, you may decide to build broader promotions around the increased foot traffic on these days. Edit your assortment and curate bundles to make purchasing really convenient. That’s something that a big-box retailer won’t do.
- You might consider making everything in your store tax-free for these days. Of course, you’ll have to pay the sales tax on items that aren’t tax-exempt, and you must check with your state tax authorities beforehand because not all states allow this.
The Bottom Line
Think of the sales-tax holiday as a way to give your customers yet another great experience in your store. Staff up if you expect more customers, and make it fun: Consider creating as festive an occasion as any holiday with live music or balloons.
2021 State Sales-Tax Holiday Dates
Information is current as of June 30, 2021; for updates, additions and specifics about exempt items, visit: taxadmin.org/2021-sales-tax-holiday. Alaska, Delaware, Montana, New Hampshire and Oregon never charge sales tax; other states, such as New York, have clothing exemptions year-round.
July 30–August 1
July 30–August 2
July 31–August 9
Arkansas (7, 8 only)
Iowa (6, 7 only)
Basia Hellwig is a founding editor of Dance Business Weekly.