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Sales Tax Holidays For Computers

CEA Applauds Enactment of Tax-free Shopping Events in New Mexico and Tennessee

ARLINGTON, Va, Aug. 5, 2005 – The Consumer Electronics Association (CEA) applauds the enactment of computer-inclusive sales tax holidays in New Mexico and Tennessee. For the sixth year, several states will be holding tax-amnesty events that include computers and related products, such as printers and monitors, bringing the tally of states that have created such a program to ten.

“The good news is that more states understand the significant benefits sales tax holidays for computers bring to shoppers, retailers and families with school-aged children. It is clear that if there is a computer in the household, children will use it for schoolwork. We hope to see more states create such a program each year,” said Douglas Johnson, senior director of technology policy for CEA.

According to CEA’s 2005 Back to School Consumer Survey, three-quarters of all Americans believe it is important for children to have access to a computer at home. However, despite a steady decrease in the average cost of computers, most Americans feel they are still too expensive for the average family. Consumers in states with sales tax think that the more affordable items for families with children are school supplies (86%), calculators (76%) and reference materials (67%). By contrast, only 36% of respondents think home computers are affordable.

Sales tax holidays remarkably improve this perception by providing an opportunity for considerable savings. For example, a $1,000 to $2,000 computer purchased without paying a five percent sales tax saves a consumer from $50 to $100. With this in mind, fifty percent of all Americans said they would be more likely to buy a computer during a sales tax holiday. For Americans with children, the incentive was even more appealing (62%).

In line with CEA’s previous Back to School Consumer Survey results, this year’s survey once again revealed that 85% of children with a home computer use it for school-related activities. The average number of hours children use a home computer is 5.2, unchanged from 2003. Children ages 12-17 use computers twice as much as their younger counterparts, averaging 8.2 hours per week.

CEA strongly supports the creation of sales tax holidays for computers and computer-related products as a way to encourage their residents to embrace technology. In addition to promoting sales of computer-related technologies, CEA believes this is an innovative way to help bridge the “digital divide”.

The states holding sales tax holidays for computer purchases this summer are:

  • Georgia (July 28 – 31)
  • Massachusetts (August 13 – 14)
  • Missouri (August 5 – 7)
  • New Mexico (August 5 – 7)
  • North Carolina (August 5 – 7)
  • South Carolina (August 5 – 7).

Tennessee’s new sales tax holiday will take place next year, August 4 – 6, 2006. The Massachusetts sales tax holiday, recently expanded to two days, is unique in that it includes essentially all consumer electronics and most consumer goods priced under $2,500.

About CEA:
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA’s members account for more than $121 billion in annual sales. CEA’s resources are available online at http://www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES – Defining Tomorrow’s Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

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