Tax-free what? S.C. Sales Tax Holiday allows odd mix of ‘back-to-school’ items

By now you’ve no doubt heard of South Carolina’s annual back-to-school tradition called the Sales Tax Holiday.
Now in its 12th year, the first weekend in August event has become the time for savings-conscientious parents to stock up on all their children’s back-to-school needs from crayons to corsets.
Locally, the sales and use tax holiday means a savings of 8 cents per dollar ... Wait a minute. Corsets?
Yes, corsets. You didn’t read that wrong. Garter belts, too. And garters. And corset laces.
In fact, all lingerie is sales and use tax-free between 12:01 a.m. Friday, Aug. 5, to midnight Sunday, Aug. 7, along with more traditional back-to-school clothing, footwear, school supplies, computers and items to set up a dorm room.
The items are among 170-plus specifically included on the S.C. Department of Revenue’s (DOR) annual list of items qualifying for the tax holiday – a program touted from the start as a way to help parents defray back-to-school costs.
But apparently, the list has grown (up?) a little since 2000.
“The exempt items provided by the DOR is a list of examples, that are exempt during the “holiday” weekend,” DOR spokeswoman Samantha Cheek said, with an emphasis on “examples.”
“The list is detailed as it is a means of trying to describe to the taxpayer examples of what is exempt during the weekend,” she said. “By stating ‘corsets’ or ‘bow ties,’ rather than ‘clothing,’ the list is more specific instead of just a broad category.”
OK, fair enough. But still, corsets and garter belts? Hard to make the back-to-school case for those.
While you could make a case for the inclusion of gowns and tuxedoes (not rented) as school prom items, what about bridal gowns and veils, which are also included on the list?
As is often the case when bureaucracies try simplifying policies by being thorough, the result is often a case of confusing “but what abouts...”
Such as: What about furs? Yes, they’re on the list. Hard to imagine shipping little Mikayla off to school in the latest Musi multi-color mink bolero jacket, isn’t it?
But what about adult diapers, antique clothing, aprons, belt buckles, costumes and hand muffs? All on the list.
Headbands, leg warmers and “shoulder pads for dresses and jackets.” Aren’t those a bit 1980s?
Though the list of “non tax-exempt items” (yes, there’s one of those too) says sports equipment is a no-no, some things definitely push the envelope: Snow ski boots, ski masks, ski suits, wet and dry skin diving suits, waders, riding pants, hunting vests, ice skates and in-line skates – all tax-free.
Then there’s stuff that just doesn’t make sense.
Roller skates? Non-taxable. Skates not attached to a boot or shoe? Taxable.
Shower curtains and shower curtain liners? Non-taxable. Shower curtain rods and rings? Taxable.
Printers and printer supplies, such as ink cartridges? Non-taxable. Other printer parts? Taxable. C’mon, are there really other commonly replaceable printer parts?
Computer keyboards, mouses, monitors, all taxable – unless they’re purchased in conjunction with a CPU (central processing unit), in which case, you guessed it, they’re non-taxable.
PDAs (personal digital assistants) such as Palm Pilots, since they’re such hot items, are also tax-exempt. Smart phones with PDA apps? No.
Then there’s the curious case of shoes and boots: Ballet, baseball, bicycle, boat, bowling (not rented), cleated, cross trainers, flip-flops, football, golf, jazz/dance, soccer, track and running shoes are all non-taxable.
Climbing boots, hiking boots, riding boots, ski boots, waders, fishing boots and cowboy boots – all non-taxable.
Safety shoes or boots used in a trade? Taxable. As is clothing used in a trade or business.
Other items directly reinforce the back-to-school rationale of the tax holiday, items such as day planners, which are specifically listed as tax-free “whether or not they include a calculator ... when used by school children as a school supply.”
Cheek said she didn’t know why the items that are on the list were included, but said they were compiled by DOR staff 12 years ago when the program first started and were approved by the DOR director.
Over the years, she said, items have been added to the list, though it has been the same for the past two years.
Side-stepping the apparent contradictory back-to-school nature of some of the items on the list, Cheek said the idea behind the holiday is as much about business as it is helping parents and students.
“It’s to benefit both the taxpayers and the businesses,” Cheek said. “It helps taxpayers, but it also helps businesses get an extra boost during that weekend.”
How much? According to Cheek, taxpayers saved more than $2.8 million in sales and use taxes during last year’s sales tax holiday – meaning businesses had more than $46.7 million in sales over that same weekend. That’s a lot of sales for one weekend.
Ahhh. Now it’s starting to make sense: Who’d have thought the lingerie-lobby would be that influential?
To take a look at the DOR’s tax-free list, as well as a list of FAQs, visit visit www.sctax.org/Tax+Policy/Sales+Tax+Holiday+Information.htm.