LANSING -- It happens every year.

Parents and kids flock to stores to buy clothes and supplies in anticipation of a new school year.

It can be an expensive time for families, especially those with many children. It’s too late to provide help this fall, but a possible partial solution to back-to-school money problems is in the works for next year.

Rep. Brian Palmer, R-Romeo, has introduced a bill that would suspend the 6-percent sales tax on certain retail items during the fourth weekend of August. The sales tax “holiday” would apply only to designated products, such as clothes, school supplies, computers and software, and would limit the tax-exempt amount spent on each.

Individual items of clothing less than $100, school supplies less than $50 each and computer software totaling no more than $350 apiece would be under the bill. Computers, including accessories, would be tax-free up to $3,500.

Items not covered under the bill include clothing accessories, such as jewelry and handbags, sport and recreational equipment, and electronic entertainment equipment.

Palmer said the tax break could stimulate retail jobs.

He also said it could improve the economy by attracting shoppers from neighboring states. “Michigan is in dire straits in terms of economics. Our economy is devastated.”

Palmer said the bill would also benefit families by leaving them more money for rent, health care and college expenses.

One co-sponsor, Rep. Marty Knollenberg, R-Troy, agreed that large and low-income families with school-age children could use help financially.

“Michigan economically is suffering, families are suffering, anything we can do to help,” said Knollenberg.

Other sponsors include Republican Reps. Glenn Steil of Grand Rapids, Howard Walker of Traverse City, John Stahl of Lapeer and Jack Hoogendyk of Kalamazoo.

Tom Scott, vice president of public affairs and communication for the Michigan Retailers Association, said that the MRA pushed for such a bill several years ago and admitted it could have trouble passing now.

“I think in the short term it will still be difficult because of the state of Michigan’s economy,” said Scott. 

“I think it will have a very positive effect,” Scott said. “That is how it has been through all of the other states it has been used.”

A growing number of states and the District of Columbia have experimented with tax “holidays.” While no neighboring states have participated, Tennessee, Texas, Massachusetts and North Carolina have provided such exemptions.

According to Palmer, consumer savings ranged from an estimated $10 million in Tennessee to $49 million in Texas.

In choosing items and amounts for exemption, Palmer said, “we pretty much pretty closely paralleled other states. We said, let’s go with something tried and proven.”

More than 73 percent of Michigan’s sales tax goes into the state’s School Aid Fund, which is currently running a deficit.

Palmer said the sales tax holiday would have little effect on the School Aid Fund because of potential increased sales of taxable items and the limit on the amount exempt.

Asked whether the break would worsen the deficit, Knollenberg said, “I don’t think it will take away from school funds. There is a limit.”

In some cases, families could make other purchases that would stimulate the economy and increase revenue for the state, Knollenberg said.

Scott agreed, saying, “The expectation or hope is that it will spur the sale of taxable items.”

The National Retail Federation estimates sales gains of 10 to 100 percent in states that have used sales tax exemptions.

Palmer said that the exempt items would help children get ready for school, so the tax break would go “towards a great cause in education.”

The bill is pending in the House Tax Policy Committee.