Few Planning Major Purchases With Tax Refund

Washington, DC, April 14, 2009--An economic boost fueled by this year's tax refunds could be limited as most people say they plan to be frugal with their annual windfalls.

In previous years, tax refunds have helped increase retail sales in March, April and May by 12 percent to 20 percent over sales in February, Internal Revenue Service Commissioner Doug Shulman said Monday.

"The tax filing season is its own stimulus to the economy," Shulman said in a speech at the National Press Club. "It helps kick off the spring shopping season and can help kick start the economy."

Thirty-eight percent of those receiving a refund said they intend to spend at least part of it, according to an Associated Press-GfK poll released Monday. But the spending appears to be mostly on basic needs: 17 percent said they would use the money for everyday needs such as food and clothing, up from 7 percent a year ago.

The survey found that 54 percent of those receiving refunds said they planned to pay off credit card, utility, housing and other bills. That compares with 35 percent who said the same thing a year ago.

Only 5 percent, about the same as a year ago, said they planned to go on a shopping spree.