Tax-free weekend could include tablets, e-readers, PCs

AUSTIN -- The back-to-school Sales Tax Holiday weekend has saved Texans more than $862 million on clothing, shoes, backpacks and school supplies.

That's according to state Sen. Rodney Ellis (D-Houston) and Rep. Dwayne Bohac (R-Houston), who say legislators interested in significantly cutting taxes this session would do well to start with expanding the holiday would be a big step.

"I intend to fight for tax cuts that will go straight to families' pocket books. After all, the sales tax holiday means real tax relief for those who need it the most," said Ellis, who authored the bill creating the tax holiday in 1999.

The two have filed Senate Bill 426 and House Bill 1087, which would each raise the cap on clothing purchases to $200. The current $100 cap has been in place since the law was passed, but Bohac says that purchasing power has been significantly degraded after 15 years of rising prices.

"Things simply cost more than they did in 1999," said Bohac, who helped add backpacks and school supplies to the list of tax-free items in 2009. With technology becoming an increasing part of the classroom, Bohac and Ellis want to add tablets, e-readers and personal computers to the list of tax-free items.

"Now we have to work to help fill those very same backpacks with the technology that the 21st Century classroom requires," said Bohac.

While there's no cap on the price of education-related technology in the initial bill, Ellis says one will be added through amendment during the committee process. Bohac suggests the final bill could cap electronics at around $600.

Ellis estimates the holiday costs the state around $80 million in taxes a year, less than .08 percent of the state's annual revenue. Yet that doesn't account for increased sales generated by the big crowds of shoppers the holiday brings.

"We do see an increase in foot traffic in the store," said Texas Retailers Association President Ronnie Volkening, "And that actually generates sales of non-exempt items during that weekend, and it has proven to be very popular with parents of school children."

So popular, efforts to end the holiday after the recession were quickly scuttled. Now even bigger savings could be ahead.