Hurricane preparedness supplies tax free later this month

AP
Published: May 16, 2008

RICHMOND, Va. (AP) _ Virginians already have been excused from paying sales taxes on back-to-school supplies and energy-saving appliances.

Now it’s hurricane preparedness supplies.

The state’s first Hurricane Preparedness Sales Tax Holiday begins May 25 and continues through May 31. During that week, sales tax will not be collected on generators costing $1,000 or less, or on nearly two dozen other items ranging from flashlights to duct tape.

State officials say they hope the 5 percent savings will encourage shoppers to stock up on items they would need if the state gets slammed by another storm like Hurricane Isabel, which left about 1.8 million Virginians without power — some for weeks — in 2003.

“As we’ve seen time and again, including recently with several tornadoes hitting the state, weather can be very unpredictable and end up causing a lot of damage and hardship,” said Tax Commissioner Janie E. Bowen. “Virginians should seriously consider equipping themselves for the upcoming hurricane season, and saving the 5 percent in the process is an added bonus.”

The Atlantic hurricane season begins June 1.

The General Assembly approved the tax break in 2007. It’s based on a similar initiative that existed in Florida for three years. Florida lawmakers, facing a $5 billion budget shortfall, did not reauthorize the tax break for 2008, leaving Virginia and Louisiana as the only states with a sales tax exemption on hurricane preparedness supplies this year.

“The reason it’s so important, and the reason the state backed it for the three years, was that retailers can’t really respond the way consumers want them to in the three days before a hurricane hits,” said Rick McAllister, president of the Florida Retail Federation. “People are panicked and buying everything on the shelves.”

Retailers are going to sell the supplies one way or another, he said, and it’s best to do it when there’s less pressure on the supply side.

“To have a list that you can check and make sure you have everything you need in advance, before a hurricane is barreling down on you, just makes sense for everybody,” McAllister said.

Florida estimated that the tax break reduced revenue by about $12 million a year. Tax officials expect the initiative to cost a little over $2 million this year in Virginia, which is smaller and less vulnerable to severe hurricanes than Florida. The cost is expected to gradually climb to $2.75 million by fiscal year 2013.

Laurie Aldrich, president of the Virginia Retail Merchants Association, said she expects shoppers to embrace the sales tax holiday. But she said it would be unrealistic to expect it to be as popular as the three-year-old back-to-school sales tax holiday, which gives Virginians a break on clothing and classroom supplies.

“Some of our members see 75 percent increases in sales during that weekend,” Aldrich said. “I don’t know that the level of awareness and hype has been here on this one like the back-to-school holiday.”

Karen Cobb, a spokeswoman for Lowe’s, could not provide specific sales figures but said the hurricane preparedness tax break was popular in the home improvement chain’s Florida stores.

“Having a tax-free holiday is a great incentive for customers who might be a little on the fence in deciding whether to prepare for hurricane season in advance,” she said. “We’ve all been witnesses to some of the disastrous results if you have a hurricane bearing down on you and you haven’t prepared to protect your home and, more importantly, your family.”

She said Lowe’s stores in Virginia’s coastal communities will have “hurricane islands” — displays grouping items needed to prepare for storms. Citing competitive reasons, she declined to say whether the company would absorb the sales tax on nonexempt merchandise, as the law allows.

If Florida’s experience is any indication, generators will be among the hottest selling items.

“Those things just flew out of the stores in the first year,” McAllister said.

Joel Davison, spokesman for the Virginia Department of Taxation, said officials consulted with retailers to come up with the list of items that would be exempt from taxation. Although the goal is hurricane preparedness, many of the items are good for year-round household use — batteries, bottled water and cell phone chargers, for example.

Virginia also had its first sales tax holiday on Energy Star appliances and products last fall.

Here is a list of tax free items:

Sales price $60 or less

—Artificial ice, blue ice, ice packs and reusable ice.

—Batteries, excluding car and boat batteries.

—Portable self-powered light sources, including flashlights, lanterns and glow sticks.

—Tarpaulins, plastic sheeting, plastic drop cloths and other flexible waterproof sheeting.

—Bungee cords, rope.

—Ground anchor systems or tie-down kits.

—Ratchet straps.

—Duct tape.

—Carbon monoxide detectors.

—Smoke detectors.

—Fire extinguishers.

—Gas or diesel fuel tanks or containers.

—Water storage containers.

—Nonelectric food storage coolers.

—Bottled water.

—Manual can openers.

—Portable self-powered radios, including those with electrical power capability.

—Two-way radios.

—Weather band radios and NOAA weather radios.

—Storm shutter devices.

—Cell phone chargers.

—First aid kits.

Sales price $1,000 or less

—Portable generators and generator power cords.

—Inverters and inverter power cables.