July 15, 2013

Bloomberg BNA: Sales Tax Slice: Attention Shoppers – A Sales Tax Holiday is Occurring in a State Near You

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(Original Post)

Thursday, July 11, 2013
by Rebecca Helmes
Your kids may have just finished school for the summer, but it’s time to start devising your back-to-school shopping plan.  A break from sales taxes may come as a welcome respite for consumers and retailers.  But these tax vacations have been consistently panned from a fiscal policy standpoint by the Tax Policy Foundation.
The Pew Charitable Trusts recently put out this sales tax holiday story and chart where you can find what, if anything, your state offers in terms of “holiday” deals, when the sales tax holiday is, and what kind of value limits the state imposes for the tax break.  It also provides links to state revenue departments’ sales tax holiday announcements, so you can make sure you know what is and is not temporarily exempt.
Whether it is good policy to give everyone a short reprieve from sales tax is another story.  Consumers and retailers have reason to support it.  Some states like Massachusetts are pressured to keep the holiday to compete with nearby, sales-tax-free neighbors like New Hampshire, according to the article.  However, the article also pointed out that Massachusetts’ sales tax holiday in 2012 cost the state $20 million. 
Back-to-school season is the second-biggest shopping time of the year, the National Retailers Federation reports, and that’s a lot of revenue that would otherwise go to the states to fund the programs they deem worthy of taxpayer support.  
Sales tax holidays started in 1980 when Michigan and Ohio experimented with tax breaks for vehicles sales.  New York started offering sales tax holidays in 1997 to keep New Yorkers from crossing into New Jersey to do their retail shopping. 
The Tax Foundation has been a longtime critic of sales tax holidays, calling them more of a political gimmick than genuine tax relief, as explained in previous Bloomberg BNA blog posts by Steven Roll and Dolores Gregory.  
Whether the holidays provide relief to those who could benefit from them most is also debatable, when low-income people with limited disposable income may not be able to buy school supplies during the small sales tax holiday window of opportunity.  Bloomberg BNA blogger Kathleen Caggiano pointed out the Institute on Taxation and Economic Policy’s suggestion to create a permanent low-income sales tax credit rather than offering a temporary sales tax holidays, because the credit would provide more meaningful relief.

Thursday, July 11, 2013

by Rebecca Helmes

Your kids may have just finished school for the summer, but it’s time to start devising your back-to-school shopping plan.  A break from sales taxes may come as a welcome respite for consumers and retailers.  But these tax vacations have been consistently panned from a fiscal policy standpoint by the Tax Policy Foundation.

The Pew Charitable Trusts recently put out this sales tax holiday story and chart where you can find what, if anything, your state offers in terms of “holiday” deals, when the sales tax holiday is, and what kind of value limits the state imposes for the tax break.  It also provides links to state revenue departments’ sales tax holiday announcements, so you can make sure you know what is and is not temporarily exempt.

Whether it is good policy to give everyone a short reprieve from sales tax is another story. Consumers and retailers have reason to support it.  Some states like Massachusetts are pressured to keep the holiday to compete with nearby, sales-tax-free neighbors like New Hampshire, according to the article.  However, the article also pointed out that Massachusetts’ sales tax holiday in 2012 cost the state $20 million. 

Back-to-school season is the second-biggest shopping time of the year, the National Retailers Federation reports, and that’s a lot of revenue that would otherwise go to the states to fund the programs they deem worthy of taxpayer support.  

Sales tax holidays started in 1980 when Michigan and Ohio experimented with tax breaks for vehicles sales.  New York started offering sales tax holidays in 1997 to keep New Yorkers from crossing into New Jersey to do their retail shopping. 

The Tax Foundation has been a longtime critic of sales tax holidays, calling them more of a political gimmick than genuine tax relief, as explained in previous Bloomberg BNA blog posts by Steven Roll and Dolores Gregory.  

Whether the holidays provide relief to those who could benefit from them most is also debatable, when low-income people with limited disposable income may not be able to buy school supplies during the small sales tax holiday window of opportunity.  Bloomberg BNA blogger Kathleen Caggiano pointed out the Institute on Taxation and Economic Policy’s suggestion to create a permanent low-income sales tax credit rather than offering a temporary sales tax holidays, because the credit would provide more meaningful relief.

 

 

 


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