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Friends of store manager Jane Walker (right) Jill Ezzel (left) and Caryn Marshall (center) shop at Three Bags Full on Montana Avenue on Thursday afternoon. (photo by Brandon Wise)

MONTANA AVE — It’s tax time again, but at least at shops on Montana Avenue, it’s also time for a break.

Merchants on the popular street are preparing for “Tax Free Day” this Saturday, an annual promotion retailers hope will bring in shoppers and make cash registers hum.

With a sales tax rate of 9.75 percent in Santa Monica, its a promotion that can equate to big savings.

Following a well attended Montana Holiday Walk in December, Mark Wain, chairman of the board of the Montana Avenue Merchants Association, said there are high expectations for this Saturday.

After the recession took its toll on Montana Avenue, Wain said new stores have filled many of the vacancies that cropped up in the past two years and business is up compared to a year ago.

“I think we have seen the worst of the crisis and were on the other side,” he said.

At least 60 shops are taking part in Tax Free Day, he said, about double the number of participating businesses two years ago.

Raphael Padilla, a commercial real estate broker with PAR Commercial, said Montana Avenue is among the areas attracting a renewed interest from prospective tenants in recent months.

He said leasing activity since January has been strong and there are signs the market for prime retail locations in Santa Monica is improving.

“This is just the beginning of a trend that I think we’re going to see,” he said. “[With] more and more people coming back into that marketplace and returning to the tenant mix and appeal that it had before.”

nickt@smdp.com