With toddler Maggie on her hip and young Elijah at her hand, Sherry Stephenson looked through the aisles of colorful notebooks and binders at P&S School Office & Art Supply.
They were picking up a few things for 7-year-old Elijah's first day of school, still a few weeks away. But they were going to wait to buy the big-ticket item, his school uniforms, on Aug. 4-6 — Tennessee's first sales tax holiday.
"I think it sounds swell," Stephenson said, "because we usually end up spending quite a lot of money on school supplies. Every little bit helps."
Thirteen states and Washington, D.C., have sales tax holidays pegged to back-to-school shopping. Tennessee, Alabama and Virginia are new this year, and Maryland is offering a tax break again for the first time since 2001.
The other sales tax holiday states are Connecticut, Florida, Georgia, Iowa, Missouri, New Mexico, North Carolina, South Carolina and Texas. New York, the first state to offer a sales tax holiday in 1997, switched in 2000 to a permanent sales tax exemption on clothing and shoes under $110.
Most holidays fall on the first weekend in August and apply to moderately priced clothing, school supplies and sometimes computers.
They are wildly popular — merchants say they boost sales, politicians say they give working families a tax break, and consumers say they can save hundreds of dollars. But the overall benefits are hard to quantify, and some critics consider the tax strategy little more than a gimmick.
"Sales tax holidays are tremendously successful," said Craig Shearman, spokesman for the National Retail Federation. He has heard of sales gains of 10 percent to 100 percent during these holiday periods, but believes the actual number is somewhere in between.
For consumers, the holidays may have a significance greater than any actual savings.
It's the idea simply of "not paying sales tax," Shearman said. "Americans have hated paying taxes all the way back to the Boston Tea Party."
Laurie Peterson Aldrich, president of the Virginia Retail Merchants Association, expects her state's sales tax holiday, also Aug. 4-6, will be an instant hit despite the relatively modest savings.
"It is one of those things you always have to pay, and suddenly you're getting one over the government and you're not having to pay it," she said.
Verenda Smith, spokeswoman for the Federation of Tax Administrators, said a psychological element is at work. "People respond to a sale, and this is a government sale," she said.
Retailers in Tennessee hope so. Outlet malls in the Great Smoky Mountains and shopping malls in Knoxville and Nashville are planning extended hours and special promotions fortified by public relations campaigns by state revenue and tourism offices.
"We wanted to turn it into a big event," said Lynn Kittel, marketing director at the 200-store Opry Mills shopping center in Nashville. The mall is offering overnight shopping packages with nearby Gaylord Opryland Resort hotel.
"Obviously, there is going to be a huge amount of traffic through here," she said. "Our experience with other properties owned by our developer, the (Maryland-based) Mills Corp., is that it is huge in other states. Texas, huge. Florida, very big."
Texas, which has held a sales tax holiday since 1999, expects shoppers to save $49 million during its back-to-school weekend on Aug. 4-6. Florida, which has held a back-to-school sales tax moratorium since 1998, expects its nine-day July 22-30 event to save consumers $39 million.
Tennessee's holiday package was adopted in 2005, but delayed until state coffers could absorb a projected $10 million tax break to consumers. The package is typical: No state or local sales taxes on clothing items or individual school supplies under $100 or personal computers under $1,500.
By comparison, Virginia will exempt school supplies up to $20 per item and clothing and shoes up to $100 each from its 5 percent sales tax. The tax break is estimated at $3.6 million.
The impact is greater in Tennessee because the state relies so heavily on a sales tax in the absence of an income tax. The state sales tax is 7 percent and local governments are allowed up to 2.75 percent. The combined 9.75 percent represents nearly $1 on every $10 in purchases.
Under the Tennessee plan, the state will restore to local governments any sales tax revenue lost during the holiday — about $2 million of the $10 million total impact.
"Creating the sales tax holiday was one of my goals from the beginning of my administration," said Tennessee Gov. Phil Bredesen, who campaigned on the issue in 2002. "The sales tax holiday positively impacts education, our No. 1 priority, ... (and) will provide tax savings for Tennessee working families as they prepare for the school year."
State Senate Majority Leader Ron Ramsey, R-Blountville, suspects the Democratic governor stole the initiative from the Republicans, but he's pleased in any case.
"Any time we can give tax breaks to citizens that is good," said Ramsey.
The Republican leader said a sales tax holiday seemed the simplest way of achieving that end. Tennessee lawmakers already have adopted a second, one-time tax holiday for April.
"It is perfectly understandable why it would be politically popular," said Scott Pattison, executive director of the National Association of State Budget Officers. "But if you were just analyzing it from a straight policy side, you would probably say it is not great tax policy" because of the revenue loss.
"I guess you have to ask what are your goals," he said.
Kaye O'Brien, a kindergarten teacher who is married to a teacher in rural Jamestown about a half hour from the Kentucky state line, said Tennessee's sales tax holiday fits nicely with her goals.
"We are doing our pay-as-you-go plan for our (two) children in college, and we watch the coupons and sales," she said. "Yeah, it is going to be great."