Md. is dressing up tax-free

Aug. 10-16: Local retailers expect the state's first tax-free week to give a shot in the arm to back-to-school sales and brighten an otherwise mediocre year.

"We're looking for bargains. My kids know how to bargain shop."

Laviola and her sons were among just a handful of shoppers getting a jump on school shopping last week at Owings Mills Town Center.

Some store managers said they've heard customers say they're holding off shopping until tax-free week starts.

Rochelle Dyer of Westminster was at Hecht's last week "just looking" for clothes for her daughters, ages 6, 8 and 10. She said she didn't plan to buy anything until Friday.

"When you have three kids and spend $200 on each child ... every little bit helps," she said.

Managers have been preparing their stores and workers for the event for several weeks.

The Target store in Ellicott City downloaded software from corporate headquarters so that exempt merchandise is not taxed, and plans to beef up staffing on the sales floor and at the checkout lanes, said Chris Green, the executive team leader of non-apparel merchandise.

Edward Hyatt, co-owner of Hyatt & Co. in Security Square Mall, The Mall at Columbia and in Owings Mills, has bought items specifically for that week at lower price points, including casual outfits and suits he'll sell for $99.99.

"That is not an item I usually have," he said.

The state comptroller's office picked the items that will be tax-free based on loose guidelines from the 2000 state law authorizing the program and on advice from other states with similar programs.

Retailers said they have been training employees to ring up items using a nontax key or reprogramming their systems to put nontaxable items in a separate category.

"It should not be a major issue," said Zerden, the owner of Queen's.

"Most people we've been talking to are looking forward to it. If it works, it's a great gimmick."

Boost or condense sales

Retailers disagree over whether tax-free week will boost sales or just condense them into one week.

Michael Niemira, a vice president with Bank of Tokyo Mitsubishi who tracks sales of national retail chains, said he believes overall sales will rise.

"When it's a new event, it probably matters much more to promote sales and demand," Niemira said. "Yes, it shifts demand, but for a first-time event, it will be incremental demand as opposed to shifting."

Still, national retail sales for August through September will be "not terribly different from the last few months, more on the sluggish side," with same-store sales expected to rise from 3.5 percent to 4 percent, helped slightly by the federal tax rebates, Niemira said.

Despite the lackluster outlook, retailers have put their school promotions into full force, kicking off new TV campaigns and bringing the first fall fashions into stores.

Sears, Roebuck and Co. is counting on the preppy and athletic looks, as well as punk-inspired T- shirts, plaid skirts and jeans, to lure students into its stores.

"Last year was more matched and coordinated," said Marie Alexander, a Sears spokeswoman."The kids today are just not wearing things that are matched. They want more of an identity of their own."

Old Navy expects miniskirts, low-rise jeans and vintage-style track jackets to be hot sellers.

"We're very optimistic that the folks are going to be shopping over the next couple of months," said Jonathan Finn, an Old Navy spokesman.

"It's been a challenging year for retailers, certainly.

"The advantage is, if the economy is tightening, shoppers will gravitate to [discount] brands like Old Navy ... without the big dollars ringing up at the register."

Items that will be tax-exempt

aerobics clothing

antique clothing

arm warmers

athletic socks

athletic supporters

baby clothes

bathrobes

bathing suits

belts

bib overalls

boots & overshoes

bowling attire

braces & supports

bras

bridal dresses

caps & hats

capes & wraps

chef's uniforms

choir clothing

clerical vestments

coats & jackets

corsets

costumes

coveralls

diapers

dry cleaning

ear muffs & bands

flip-flops

formal clothing

fur coats & stoles

garters

gloves & mittens

golf clothing

graduation attire

gym suits

hand muffs

hosiery

hunting attire

jackets

jerseys

jogging apparel

lab coats

laundry services

leather clothing

leg warmers

leotards & tights

lingerie

martial arts attire

pants & shorts

prom dresses

rain attire

religious clothing

sandals

Scout uniforms

shawls & wraps

shirts

shoes & slippers

ski attire

skirts & blouses

sleepwear

slips

socks & stockings

suits

suspenders

sweaters

sweat shirts

swim attire

tennis shoes

tennis attire

tights

tuxedos

underclothes

vests