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Sales Tax Holidays? Special Report

Posted by salestax on August 31, 2009

The Tax Foundation has published a report on Sales Tax Holidays throughout the U.S. 

As most know, many states pass legislation each year or have passed it for the future, to allow for various sales tax holidays where the buying public doesn’t have to pay sales taxes on purchases normally subject to the State and sometimes Local sales tax.

In general, these holidays usually come in the form of back-to-school tax holidays where consumers can purchaes items like shoes, clothes, supplies, books and even computers without paying sales tax (TX, NC , etc.).  While other states have started implementing Green holidays (GA, WV, etc.) where you can purchase energy efficient rated appliances tax free or holidays that tout the 2nd amendment for guns and rifles (LA, SC).  And then there are yet other tax holidays that appeal to people living in hurricane zones where supplies for disaster preparation are exempt (LA, FL). 

However, regardless of the tax holiday, it’s purpose or meaning, the Tax Foundation has found fault in this practice.  Some of their arguments are:

  • Sales Tax Holidays do not promote economic growth, but merely shift purchases from one time period to another.
  • If a state must offer a sales tax holiday from its tax system, it’s a sign that the system is uncompetitive and the whole system should be looked at, not just a time period.

What do you think?  Tax holidays good or bad? 

For more information on the existing tax holidays, see my other post where I’ve tracked the Sales Tax Holidays for 2009 and I do plan a new post for the upcoming 2010 Tax Holiday Season, because I highly doubt that the states will take seriously what this agency has proliferated as the truth in their research.

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One Response to “Sales Tax Holidays? Special Report”

  1. […] concern your business particularly, it’s a good read regardless. I found their post on “Sales Tax Holidays” to be intriguing – sales tax holidays are state legislation passed events where the […]

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