Home Blog Tax Refund Delays Can Hurt the Sports Business
Feb 14, 2017

Sneakernomics: Tax Refund Delays Can Hurt the Sports Business

Subscribe to our blog

In 2015 Congress passed the Protecting Americans from Tax Hikes (PATH) Act. One of the main provisions of PATH was to slow down taxpayer refunds for the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit. The slowdown was intended to give the IRS more time to investigate for fraudulent claims. It is estimated that about 28 million taxpayers filed for EITC in recent years.

The effect of this slowdown in payments means that the IRS will not be issuing EITC refunds until February 15, 2017. Taking weekends, processing time, and the Presidents’ Day holiday into account, estimates are that refunds will not begin to be received until February 27, and many may extend into March.

EITC benefits low to middle income households with children. It allows parents to claim up to $3,300 for one child and more than $6,250 for three children. The magnitude of the credits is in the tens of billions of dollars.

Since most low to middle income families are living paycheck to paycheck, this tax credit is a financial windfall. Many low to middle income families spend their tax refunds as soon as they receive it.

The timing of the refund has a profound impact on sports retail, particularly sneaker sales. In years past, processing glitches have delayed refunds and the industry suffered until the refunds hit.

We can expect a soft February for sales of athletic footwear and apparel due to this new law. While the industry will make up these sales in March, it will make trending difficult and retailers and brands anxious. Coupled with a late Easter this year, Q1 will be a challenging one for the sports industry.



Stay current in your industry
SUBSCRIBE

Related Blog Posts

Tagged: Sports


VSCO Girls: How A Consumer Group Born on Social Media Has Cross-Industry Implications
VSCO Girls: How A Consumer Group Born on Social Media Has Cross-Industry Implications

The VSCO girl subculture took hold this summer and has created opportunities for products and brands in a variety of industries including apparel, beauty, fashion accessories, footwear, sporting goods and technology. We asked our industry analysts to weigh in regarding the implications and opportunities for their industries.

Let’s Grow the Pie, Not Fight for the Last Slice
Let’s Grow the Pie, Not Fight for the Last Slice

The NFL’s and Dick’s Sporting Goods’ investments in flag football, and cycling’s strategic focus on e-bikes are examples pointing to opportunities to find new growth by boosting interest in a category and inviting participation versus direct brand competition.

Sneakernomics: Holiday 2019 Predictions for Sports Retail
Sneakernomics: Holiday 2019 Predictions for Sports Retail

Matt Powell predicts that the lack of truly “hot” items is a void that will put pressure on the athletic footwear and activewear markets. On the other hand, he anticipates a merrier performance stemming from smaller brands in the space, and from some outdoor and sports equipment categories.

Sneakernomics: Athletic Footwear and Activewear Third Quarter Results
Sneakernomics: Athletic Footwear and Activewear Third Quarter Results

NPD’s Matt Powell reviews the performance of athletic footwear and activewear categories during the third quarter of 2019. From casual and performance sneakers to athletic attire, this blog looks at where the industry currently stands and could potentially be heading.

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice.

Follow Us

© The NPD Group, Inc.