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Business brisk on Vt. tax holiday

Critics pan event as a gimmick

Email|Print|Single Page| Text size + By John Curran
Associated Press / July 13, 2008

BERLIN, Vt. - Bargain-hunting consumers flocked to Vermont's furniture stores, appliance stores, and kitchen retailers yesterday to take advantage of a two-day sales tax holiday that suspended the 6 percent levy on nonbusiness purchases of $2,000 or less.

The sales tax suspension, proposed in April by Governor Jim Douglas and later endorsed by state lawmakers, was aimed at jump-starting an economy slowed by high gas prices, a sluggish real estate market, and lingering consumer uncertainty.

Denounced by critics as a gimmick, the two-day "holiday" - which began yesterday and continues today - added up to big business for many Vermont retailers.

Many got return visits from customers who had already picked out what they wanted but waited until yesterday to buy it. Some stores had sales of their own to piggyback onto the sales tax suspension. Some added staff to cope with the expected crush.

They weren't disappointed.

"We are swamped," said Sandy Belval, store manager at Central Appliance in Brattleboro. "It's exciting. I've never seen quite this much business in the state of Vermont. Everybody's saying they wouldn't be buying today except for the no-tax holidays."

In anticipation of the temporary boom, the store put five people on duty yesterday, instead of the customary two. But unlike many other stores, it didn't advertise.

"We didn't have to do any advertising. The government did it all," Belval said.

The exemption applied to "tangible personal property" under $2,000, except vehicles. It will be extended through Friday for Energy Star-rated appliances that cost $2,000 or less.

State officials say the loss of revenue from the sales tax suspension could cost the state $2 million. The state also set aside $50,000 to help stores reprogram their cash registers and $100,000 to reimburse eight municipalities that have a 1 percent local sales tax in addition to the state's 6 percent, according to Tax Commissioner Thomas Pelham.

"If people are making a date of it and going out shopping, they may stop and eat lunch and bump up the rooms-and-meals tax," said Tasha Wallis, executive director of the 400-member Vermont Retail Association. "We're hopeful it's a win-win for everybody."

At Novello Furniture in Berlin, Marty Kovacs, 64, of Worcester bought a $350 bench for his mud room and a $2,100 bedroom set.

"We came out specifically because of the tax-free weekend," he said as a worker loaded the bench into the back of his sport utility vehicle. "We'd looked at [the bedroom set] a couple of months ago and decided to wait until this weekend because of the sales tax."

Kovacs, who formerly lived in Texas, said sales tax holidays helped stimulate the economy there, and he believes they'll do the same in Vermont.

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