Back-to-School Season Moves into Full Swing
The first week of August is now underway and that first day of school is creeping ever closer. Parents are spending money but just how much has yet to be tallied.
The National Retail Federation’s 2010 Consumer Intentions and Actions Back to School Survey, conducted by BIGresearch, found that the average American family will spend
$606.40 on clothes, shoes, supplies, and electronics, compared to $548.72 last year. This year’s estimate is closer to the $594.24 spent in 2008. Total spending on school-aged children in grades K–12 is expected to reach more than $21 billion. If combined with college spending the number rises to more than $55 billion, certainly making it the second-largest selling season right behind the holidays.
Spending on apparel will eat up a majority of the budget with the average family expected to spend $225 on that category. Electronic- and computer-related school needs are expected to account for roughly $182. Families will spend $102 on shoes and $97 on school supplies.
Consumers reported that they will be heading to discount stores first and then to their favorite department stores.
Target began running its back-to-school TV campaign in late July. Kmart technically got started earlier if you count its layaway ads mid-summer. In late July, Walmart announced that it was pricing many back-to-school items at $9. Sears launched a Facebook page targeting college students called The Campus Connection.
Internet Retailers May Have to Collect Sales Tax
Retail and shopping center executives came together in Washington, D.C. recently in a show of support for U.S. Rep. William Delahunt (MA-10) proposed Main Street Fairness Act (H.R. 5660). If enacted, it would require internet retailers to collect sales taxes for all purchases made online. Currently, internet retailers only have to collect sales taxes in states where they have a physical nexus (store, office, warehouse, or distribution center), according to the International Council of Shopping Centers (ICSC), which released this information.
“Many internet retailers currently enjoy a competitive pricing advantage over brick-and-mortar retailers because of a loophole in the tax code that doesn’t require them to collect state sales taxes. The Main Street Fairness Act would ensure that all retailers, regardless of where they are located, collect and remit state sales taxes,” Congressman Delahunt explained.
According to ICSC, most states already have what is known as a “use tax,” which requires consumers to pay a tax when they make a remote or online purchase and sales tax is not collected by the retailer. However, few consumers are aware of this tax liability. This uncollected tax can represent a sizable amount in lost revenue for states. A 2009 University of Tennessee study estimates that in 2012 that number could be as high as $23 billion.
“The argument made by internet retailers over a decade ago that they could not collect and remit local sales taxes, because of a patchwork quilt of state sales tax laws, is no longer valid. Today, low-cost technology exists to enable retailers to calculate the amount of sales tax owed on internet purchases. If brick-and-mortar retailers collect and remit taxes on internet purchases then internet retailers can and should,” said Michael P. Kercheval, president and CEO, International Council of Shopping Centers, in a statement.
The legislation is supported by the National Retail Federation, Retail Industry Leaders of America, International Council of Shopping Centers, Real Estate Investment Trusts Association, National Governors Association, U.S. Conference of Mayors, the National Conference of State Legislatures, National Association of Counties, and National League of Cities, as well as over 50 state-level retail associations and chambers of commerce.