Back-to-school tax cuts may not help University students

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Posted: August 2, 2010 - 10:08 PM
Tagged with: Illinois, school supplies, tax break, tax cut
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In the midst of slow economic growth, Illinois is taking a holiday — from its sales tax.

Beginning this Friday, consumers will get a five percent sales tax break on purchases of school supplies at retailers throughout Illinois from Aug. 6-15.

But with several hundred dollar school supply budgets, college students may struggle to see a significant decrease in their expenses this semester, as many supplies are excluded from the tax break.

Signed into law by Gov. Pat Quinn on July 7, the tax holiday applies to most clothing and footwear that costs less than $100 per item and basic school supplies, including pencils, crayons and notebooks.

It is the first time the State of Illinois has implemented such a holiday.

“Pretty much everyone is on a level playing field with this in the sense that it is across the state, so everyone is participating in it,” Meijer director of public relations Frank Guglielmi said Monday.

“Customers are the ones who really win here.”

Like many retailers throughout the area, Meijer, 2401 N. Prospect Ave. in Champaign, has already begun to market school supplies at discounted prices as the school year draws near, and store officials do not plan on changing anything on account of the holiday.

“I can’t speak for other retailers, but we’re keeping our sales and our discounts and our promotions going full steam ahead through the back-to-school season,” Guglielmi said.

But glue sticks and markers are not the items that worry most college students.

The University estimates the cost of books and supplies for this year’s incoming freshmen to be about $600 per semester, according to the Admissions website.

Textbooks, which account for a majority of these expenses, do not qualify for the holiday however.

Along with textbooks, computer-related items, such as flash drives, CD-Rs and printer ink do not qualify for the sales tax holiday.

More advanced art supplies, including paint brushes and clay, are excluded as well.

T.I.S. store manager Brian Paragi said the holiday will not affect the pricing in his store, 707 S. Sixth St. in Champaign, which sells mostly textbooks, supplies and apparel.

While five percent of the sales tax will be cut from next week’s receipts, another 1.25 percent of the state’s sales tax remains, along with 2.5 percent in local sales taxes at retailers in Champaign and Urbana, according to the Illinois Department of Revenue’s website.

Paragi said he thinks this will be confusing to customers.

Some students across campus said they do most of their shopping online, where the sales tax depends on the tax rate of the state from which an item is purchased.

Beth Hagen, junior in LAS, and Sarah Piekarski, junior in AHS, are unsure if the holiday will affect the total on their school supplies’ receipts, but it could provide an incentive to go clothes shopping.

“Every little bit helps,” Hagen said.

At a time when the state is struggling to keep up with its payments to social services and public institutions such as the University, J. Fred Giertz, professor and head of the department of economics, said he does not think Illinois is in a position to provide such a holiday.

He added that the holiday could do more bad than good for the state.

“People might delay their purchases until a holiday or speed up purchases until the holiday is over,” said Giertz, who is also a member of the University’s Institute of Government and Public Affairs.

“So most of the increase in the spending during a tax holiday is taken away from the period before or after.”

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