Local businesses prepare for big crowds at annual sales tax holiday

Every year, Dubuque business owner Terri Meadows plans a clearance sale for the first weekend in August.

Not only is it a good time to mark down summer merchandise, but Meadows knows that customers already will be drawn to HJ’s Fashion Emporium, 241 Main St., by the allure of a tax-free shopping experience.

“This way you save money on both ends — you save with me and you save with the government,” she said.

Iowa’s annual sales tax holiday will take place Friday and Saturday, Aug. 6 and 7. On these dates, sales tax will not be charged on most articles of clothing or footwear that cost less than $100. All businesses that are open on these days must participate.

Multiple local business owners said the sales tax holiday is typically a big draw for customers.

“We are usually pretty steady on those days, and we do see a lot of people out specifically shopping to take advantage of the tax-free weekend,” said Natalie Mormann, owner of Finery, a women’s clothing store with locations in Peosta, Manchester and Waterloo.

Because the sales tax holiday is always scheduled just before the start of a new school year, stores often see an influx of families, students and customers of all ages. Mormann said Finery is typically filled with mothers and daughters shopping together throughout the weekend.

Donna Weber, owner of Classy & Chic Boutique, 1065 Jackson St., Suite 200, in Dubuque, said high school and college students usually come with their parents.

“We definitely see more traffic and a lot bigger sales during that Friday (to) Saturday period,” she said.

Jennifer Recker owns J&R Fashions and Haberdash Outfitters Co. in Dyersville. While this will be the first sales tax holiday for Haberdash, which opened in November, J&R Fashions has participated for several years, so Recker has a good idea of what to expect.

“We see a lot of people coming and doing lots of back-to-school shopping (and) lots of teachers coming in and preparing to go back to school. It is typically a very good sales weekend,” she said.

Preparation for the sales tax holiday begins several days before the big event, as owners make sure their racks are filled and their workforce is ready to meet the demand.

“We bring in lots of extra merchandise, mainly focusing on new fall stuff that will be coming in for back-to-school shopping, and we do (increase) our staffing,” Recker said.

Meadows stocks her Dubuque store with merchandise from the shops she also owns in Galena, Ill. — including Honest John’s Trading Post, Honest John’s Emporium and Union Leather — to ensure she is ready for the weekend crowd.

“There might be stuff here people haven’t seen all season because it’s been in Galena,” she said. “I just make sure I’m full, and then, we start marking down.”

Iowa is one of 17 states that will hold a sales tax holiday in 2021, according to personal finance website WalletHub. Neither Illinois nor Wisconsin join that list, which allows Dubuque businesses to attract out-of-state customers eager to score some tax-free deals.

“We see a lot of traffic from the other states all year, but definitely on that weekend,” Weber said.

Meadows said the COVID-19 pandemic put a slight damper on last year’s sales tax holiday, but she hopes this weekend’s sales will mark a return to her typical level of traffic.

“Last year, people weren’t going anywhere. Nothing was happening (and) no events were going on, so people weren’t going shopping,” she said. “This year, everybody’s ready to go out, and everybody’s ready for something new.”

Mormann agreed.

“This year, I’m hoping to see more people in the stores and taking advantage of being able to shop in person locally,” she said.