BP and Florida Business Impacts

By: Whitney Ray Email
By: Whitney Ray Email

Florida retailers are asking BP to sponsor seven sales tax holidays to make up for the damage caused by the company’s oil spill. The Florida Retailers Federation, along with Florida TaxWatch, estimate the spill cost the state half a billion dollars in economic activity. The state lost out on 15 million dollars in sales tax collection. Laurie Olshefski (Ole-Chef-Ski), a panhandle gift shop owner, says her profits tanked.

“When the oil spill hit and the scare, people stopped coming. They canceled their reservations. They went to places where they were guaranteed to have a great vacation with their family, because family time is very important and they didn’t want to take a risk with not having a guarantee on their vacation,” said Olshefski.

President of the Florida Retail Federation Rick McAllister says stores owners don’t want a handout. They want their employees to be able to work.

“What we are looking for are incentives for people to return to the area to shop. We are asking for marketing dollars in those drive markets, you know the Atlanta, the Montgomery, the Birmingham, the Memphis areas, where most of the people come from that fly in for long weekends and weeks. There are driving markets in there that are very critical to us. We need those people coming back in for day trips, weekend trips, and day long stays,” said McAllister.

The federation estimates it will cost around 25 million dollars to sponsor the sales tax holidays.


Statement from Rick McAllister, President and CEO Florida Retail Federation

“As we discussed with reporters today, the Florida Retail Federation, in conjunction with a coalition of retailers from NW Florida, has submitted a proposal to BP that outlines a plan to allow BP to assist with mitigation against future losses.

The best option, we believe, is a series of sales tax holidays, one weekend per month for a period of seven months beginning in February 2011 and running through August 2011. Sales tax holidays have proven to be enormously successful in Florida, and we think the proven track record of these holidays will stimulate retail shopping experiences in NW Florida. Sales tax holidays make shopping a community event and primary social activity. Studies show:

· Consumer response goes beyond what could be expected by the price discounts alone

· Sales tax holidays increase store traffic

· Retailers aggressively compete for a share of the increased traffic with additional discount offers and marketing promotions

· The holidays provide retailers with additional “events” to highlight in their own marketing, assuring local effort will more than match the mitigation dollars invested to market the recurring sales tax holidays

The tax-free weekends would be directly tied to retail sales – promoting tax-free shopping weekends, proposed for the second weekend of each month (tax-free on all items $200 or less, Friday through Sunday). Marketing campaigns and incentives would be focused on retail, but coordinated with lodging and restaurant tourism mitigation marketing campaigns to maximize reach and impact of all efforts. Making this proposal even more appealing and efficient is the fact that this does not require legislative approval to implement. The estimated $25 million it would cost over the course of the seven-month campaign would be dollars going directly from BP to the State of Florida to cover the cost of the taxable items.

BP has not agreed to this proposal yet, but we believe that this is a win-win-win situation for retailers in those five counties, BP and Florida’s economy.

We look forward to working with BP on further refining this proposal and implementing a plan that will put retailers in Northwest Florida back on track for a successful 2011 as well as creating more jobs for people in the region.”

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