Marc Schoder: PNT Staff Writer
For the first time in the state’s history, New Mexico shoppers will get a break on state and local taxes Friday through Sunday during the state’s first “Back to School” gross receipts tax holiday.
The bill passed successfully during the 2005 legislative session.
State Sen. Stuart Ingle, R-Portales introduced the legislation that was incorporated into a House bill that was signed into law giving New Mexicans a “tax holiday” each August.
“Slashing prices isn’t exclusively for stores any longer. Now the state of New Mexico is doing it,” Ingle said in a release. “It’s like buying everything on sale when we do not have to pay gross receipts tax. Right off the bat, shoppers will save at least 6 percent, the cost of the tax, on each item.”
Items during the upcoming weekend that are nontaxable include clothing and footwear of $100 or less and school supplies, such as pens and paper. Also included are computers $1,000 or less, as well as assorted computer equipment $500 or less.
According to the release, the price cap is on individual items and not the total amount purchased. For example, a family could purchase three computers less than $1,000 each and not pay any taxes.
“It will benefit the community when people are staying in town to spend their money,” said Kim Huffman, executive director of the Roosevelt Chamber of Commerce. “Not just in clothing establishments for back to school, (but) local eateries will receive benefits from this weekend as well.”
The tax-free status does not apply to clothing or footwear that is primarily designed for athletic activity or protective use, or accessories such as jewelry, handbags, wallets, and watches.
Participation in the tax holiday is voluntary for retailers.
“We are expecting to double our sales over last year,” said Jay Cordray, manager at the Wal-Mart in Portales.
A Texas tax free holiday is being held on the same weekend, according to state of Texas Web site.
According to the release from Ingle’s office, the state is projecting that New Mexicans doing their back to school shopping will save more than $2.1 million by not having to pay state and local gross receipts taxes.
North Plains Mall in Clovis has done a tax free weekend in August to stay competitive with Texas for the last three years, according to mall manager Cindy Banister.
“That weekend is 3 percent of the merchants’ annual sales,” Banister said. “Our four department stores are eager for this weekend.”
Banister added that she expects the tax holiday weekend sales to grow each year.