Computers in High Demand for This Year's Back-to-School Sales Tax Holidays; New Survey Finds That Low Income Households are Especially Responsive to Sales Tax Holidays.

Business Editors/High-Tech Writers

ARLINGTON, Va.--(BUSINESS WIRE)--July 24, 2003

As five states prepare to hold back-to-school sales tax holidays the first weekend in August, a new survey released today by the Consumer Electronics Association (CEA) finds that home computers will be a popular purchase this year. The second annual national survey by CEA, The Back-to-School Computer Report, confirms that home computers have become a staple for students returning to school. The report finds that 73 percent of Americans consider home computers to be an important back-to-school item for schoolchildren. In contrast, only 56 percent feel that traditional back-to-school items, such as new clothes and shoes, are necessary for children returning to school. At the same time, 88 percent of students with home computers use them for schoolwork, with the average student using a home computer five hours per week for schoolwork.

"We found that computers have clearly surpassed traditional purchases like clothes as a back-to-school necessity for schoolchildren," said Gary Shapiro, president and CEO of CEA. "Upcoming sales tax holidays will help make computer purchases a little easier for families."

The survey also revealed that a significant technology divide continues to separate Americans. According to CEA's report, 68 percent of respondents earning under $15,000 feel a computer is important for schoolchildren, although 55 percent of them do not own a computer. In comparison, only eight percent of households earning over $50,000 do not own a computer. However, 64 percent of those earning under $25,000 said they would be more likely to buy a computer during a sales tax holiday, a level of interest that is 12 percentage points higher than the national average of 52 percent who report they are more likely to by a computer during a sales tax holiday.

"While the digital divide still exists," said Shapiro, "the good news is that these sales tax holidays being held around the country this August can help more families bridge that divide."

For the first time ever, five states - Georgia, North Carolina, South Carolina, West Virginia and Vermont - will allow consumers to purchase tax-free computer products, school supplies and clothing during August 2003.

"It's obvious that these five states, despite the tough economic climate, understand the significant benefits that sales tax holidays bring to shoppers, retailers and families with schoolchildren," said Shapiro. "These sales tax holidays really help make computers and other back-to-school necessities more affordable for families with schoolchildren, and help open the online educational world to kids."

Vermont is the newest state to begin offering sales tax holidays to its shoppers. In addition, under a law enacted this year, Missouri will hold a sales tax holiday for computers in 2004. Additional information about this initiative can be found on the CEA website at: www.ce.org/taxholiday.

About CEA:

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 1,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $85 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Tomorrow's Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

UPCOMING EVENTS

CEA 2003 Summer Technology & Standards Forum
August 4-8, 2003, Quebec, Canada

CEA 2003 Fall Conference and Industry Forum
October 12-15, 2003, Carlsbad, CA

2003 Fall Electronic House Expo (EHX)
November 11-13, 2003, Long Beach, Calif.

2004 International CES - Defining Tomorrow's Technology
January 8-11, 2004, Las Vegas, NV