Comptroller Hopes State Sales Tax Holiday is Shot in Arm for Economy

Maryland's tax-free week this year is Aug. 14 to 20 and applies to clothing and footwear.

This year’s sales tax-free week in Maryland could deliver a much-needed stimulus to the state and local economies, said the state comptroller.

Comptroller Peter Franchot and local officials paid a visit to downtown Annapolis retailers on Wednesday to discuss the details of this year’s tax-free week, Aug. 14 to 20. Any clothing or footwear item that costs less than $100 will not be charged the regular 6-percent state sales tax.

“I know it’s a little odd for the tax collector to be out saying, ‘Go out and shop and you don’t have to pay taxes,’ but this is a very important boost to Maryland consumers and retailers,” Franchot said.

Franchot met with Annapolis Mayor Josh Cohen, President of the Maryland Retailers Association Patrick Donoho, and store owners along Main Street on Wednesday to explain why this week’s tax-free weekend was vital to the state and local economies.

Larry Vincent, store owner of Laurence Clothing Inc. in Annapolis, said the sales-tax holiday will hit Maryland at a time when retailers are generally clearing out their summer inventory, so it’s also a great time to save money.

“The consumer not only has a chance to save money with sale reductions but also save on sales tax. So it’s particularly good for circumstances like moms shopping for back to school,” Vincent said.

Franchot said the state’s economy was stuck in limbo. During last year’s tax-free week, retailers experienced double-digit sales increases. That’s what’s needed this year, he said.

“As much as we need to be careful about spending and borrowing our public budgets, we need to urge our citizens whenever appropriate to open up their wallets,” Franchot said. “Without their spending, our economy is going to stay in neutral.”

As parents gear up for back-to-school season, Cohen said the tax holiday is a great time to save some money. It’s particularly a boon to those stretching their wallets, he added.

 “At a time when families are trying to stretch their last dollar to pay for school and household items, tax-free shopping week is a great service. It’s good for businesses and it’s good for families,” Cohen said.

Franchot conceded that when the state launches such a sales-tax holiday, it forgoes much-needed tax revenue. But he said the hit to sales-tax revenue was worth it to spur activity at retailers across the state.

“The state did see a dip in sales tax revenue (last year), but there was a significant double-digit increase in retail sales,” he said. “That’s what we need now.”

The tax-free week was made an annual event by the Maryland General Assembly in 2007. Last year’s tax-free week also hit just before the start of the school year.

This year’s tax-free week will start Aug. 14. For a full list of qualifying merchandise, visit the state comptroller’s website.


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