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North Carolina's inaugural Energy Star sales tax holiday snuck up on retailers last year. But this time around, local appliance sellers say, they're prepared for three-day sales tax break on selected appliances – and expecting crowds of interested shoppers.
From Friday through Sunday, major appliances bearing the federal government's Energy Star seal will be exempt from sales tax – 8.25 percent in Mecklenburg County, and 7.75 percent in most other areas. Unlike the state's back-to-school tax holiday, there's no price limit on purchases.
Those buying a $1,000 washing machine, for instance, could save $82.50.
As with the Cash for Clunkers car program this summer, the goal is to encourage shoppers to replace old models with something greener. Many promotions for the tax holiday play up new appliances' potential to save money on energy bills.
“We were somewhat surprised by the success of it (last year),” said Roddey Player, CEO of Queen City Audio Video & Appliances. “This year, we've put a lot of planning into it and made some special purchases to get geared up for it.”
Qualifying products are Energy Star washing machines, refrigerators, freezers, central and room air conditioners, air-source heating pumps, ceiling fans, dehumidifiers and programmable thermostats. Only products ordered for immediate delivery will be tax-free, though delivery itself can occur later. Products delayed because of a back order also qualify. Those ordered for a later date don't count, though, nor do rentals and sales to businesses, including contractors who will install products for customers.
People appear to be waiting for the tax holiday to make their purchases, said Bill Pleasants Jr., general manager of Plaza Appliance. The local chain was pleased to get a positive reaction to the holiday last year, despite doing little advertising for it. This year, Plaza is running both print and television ads and expects more business, Pleasants said.
Queen City expects to do about two to three times its normal sales this weekend, and more than during last year's holiday, too. Most appliance retailers are also running additional discounts and specials.
The N.C. Department of Revenue does not yet have an estimate of the amount of tax revenue it expects to lose under the program. Six other states also have appliance tax holidays. South Carolina's legislature approved one in 2008, but it never took place, due to a state court ruling.
And though buyers under the tax holiday aren't required to turn in their old appliances a la Cash for Clunkers, appliance dealers nonetheless end up hauling away enough to know that they are indeed taking clunkers off the grid.
“Most people hold onto their appliances,” Pleasants said. “When I start seeing harvest gold and fresh avocado appliances, I know those things are old. And very inefficient.”
Shoppers that remain on the fence this weekend will likely have other shots at government-sponsored appliance rebates before next November: The N.C. State Energy Office has proposed using $8.8 million in federal energy-efficiency stimulus money to provide rebates during designated periods spring, for people replacing certain appliances and heating and cooling systems with Energy Star models.
The federal government is also offering a 30 percent income tax credit on certain energy-efficient home improvements, such as new air conditioning systems, in existing homes in 2009 and 2010.
