Shoppers who step inside Stitchology next Saturday will find a little more than clothespins, spools of thread and sewing kits.
Every year, Melisa Hart, owner of North Valley Tailoring and Clothing Store, does something special for Small Business Saturday.
This year, she will offer hot cider and cookies outside the store; inside, customers can learn how to sew her Christmas stocking pattern, or make and take home fabric ornaments.
“I like to try to give them a little incentive to come in or do something fun and special,” Hart said.
Celebrated the day after Black Friday, Small Business Saturday was founded in 2010 by American Express and co-sponsored by the US Small Business Association a year later. A survey by American Express estimated that consumers plan to spend $23.3 billion at independent retailers and restaurants on Small Business Saturday in 2021. Over the past 12 years, the company found that consumers reported $163 billion in spending on the day.
Hart said Small Business Saturday is one of her busiest days of the year. Last year, Hart’s sales were 280% higher than an average Saturday.
Participation in the program exploded last year. In November 2020, only 20 businesses made claims to the NM Department of Taxation and Revenue for a total tax break of about $10,000 – half of the inaugural year’s participation in 2018, when 40 businesses made claims.
However, in November 2021, 258 businesses statewide submitted claims for a total tax savings of approximately $186,000.
“It’s really making a difference to make a concerted effort to get the word out,” said New Mexico Secretary of Taxation and Revenue Stephanie Schardin Clarke.
The Department of Taxation and Revenue, the Department of Economic Development and New Mexico MainStreet have been trying to raise awareness and plan events around the tax holiday.
Background
The New Mexico State Legislature established an annual Small Business Saturday tax holiday in 2018. Businesses that are based in New Mexico and have fewer than 10 employees can file a gross receipts tax exemption for that day and pass savings to their customers.
New Mexico Secretary of Taxation and Revenue Stephanie Schardin Clarke said small purchases help New Mexico’s economy.
“It keeps the employment base here,” Schardin Clarke said. “The money we spend when we shop locally goes back into the local economy more than when we shop at the big box stores.”
Although several other states have tax holidays throughout the year, New Mexico is the only state with a Saturday tax holiday for small businesses, according to the Tax Foundation. In August, New Mexico also offers a school tax holiday.
The impact felt
Hart recently celebrated the 11th anniversary of her business at 2502 Rio Grande NW. Although Small Business Saturday started nationally around the time she opened Stitchology, she said it wasn’t until 2018, when the state introduced the tax break, that more customers became aware of the day.
Color Wheel Toys owner Keri Piehl said the party also helps customers discover local businesses around Albuquerque.
“It definitely has an initial impact just on the bottom line,” Piehl said. “But then I think it’s also the memory of those businesses to patronize throughout the year … so that’s helpful to cheer and promote the small business community.”
Former teacher Piehl ran Color Wheel Toys as a seasonal pop-up shop for five years before moving to a permanent location in Rio Rancho earlier this year at 6855 4th NW. Small Business Saturday falls in the middle of the main toy season, with Christmas just a few weeks later.
She said she prepares for the day by making sure the shelves are fully stocked.
Small Business Saturday brings an increase in sales, Piehl said. But most of her customers, she said, decide to shop not because of the tax break, but to support locals. Some are even “pleasantly surprised” by the tax break.
Schardin Clarke said this year, the tax break could help customers cope with higher prices.
“Especially at a time when families are struggling with inflation, it’s great to have that tax relief available,” Schardin Clarke said. “But beyond that, I think it’s a great way for customers to get to know local businesses they might not have shopped at before.”
Carolyn Richter opened her low-waste refill shop, People & Planet Refill, on Earth Day this year at 3223 Silver SE. Customers can bring their own containers and fill them with laundry detergent, shampoo, dish soap and more to reduce their packaging waste.
This will be Richter’s first Small Business Saturday as a business owner. She said that before opening her Nob Hill business, she wasn’t very aware of the tax break.
“More people, more customers need to know about it,” Richter said. “Because if they can go out and still give a business, you know, the full money they would get, but the customer still gets a discount, then everybody wins, right?
Richter said she has felt pressure to offer sales on Small Business Saturday, but has decided not to offer discounts.
“Even if I had a sale … it’s not like I can compete with the big stores anyway. If Target has a Black Friday sale, then I can’t compete with that,” Richter said. “And so my point is, if you’re going to go out on Small Business Saturday, you support businesses because you care about them .”
Richter said many small business owners have told her that Small Business Saturday is a make or break day. With holiday spending on the rise, small business owners can pad their budgets for slower months in the new year. Increased spending on days like Small Business Saturday can help business owners prepare for slower months.
“What I’ve been told by a lot of other people … is that they really, really, really hope they have a very good year-end quarter,” Richter said. “Because they may not have the income they need to cover regular expenses in the new year.”
The holiday begins at 12:01 a.m. on Saturday, November 26 and ends at midnight on the same day.
“If you haven’t found your favorite local business yet, now is a great time to find your favorite in your community,” said Schardin Clarke.
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