July 26, 2013

Jackson Clarion Ledger: Drastically differing views on this weekend’s sales tax holiday

media mention

(Original Post)

Mississippi’s annual “sales tax holiday” for clothing and footwear begins Friday, aimed primarily at helping parents with back-to-school purchases.
I’ve received two correspondences on the holiday, one from a group saying it’s great, another saying it’s not.
The Mississippi chapter of the National Federation of Independent Businesses says it’s “a big help to small businesses amid a wobbly economy.” NFIB supported Mississippi’s tax holiday, which was passed by the Legislature in 2009 after years of debate.
Ron Aldridge, state director of the NFIB, said, “The sales-tax holiday puts people in the mood to shop, and we’re hoping they buy at least some of their school clothes … at small, locally owned businesses, because when you support small businesses, you’re supporting the community.”
But then Citizens for Tax Justice and the Institute on Taxation and Economic Policy has sent out a release saying, “Sales tax holidays make great politics but they don’t solve enduring problems. They fall short of accomplishing what advocates claim, that is, helping hard-pressed consumers or local retailers.”
The group said “more of the benefit goes to more affluent customers” because they have more discretion on when they spend their money and “There is also evidence of unscrupulous retailers holding fake sales in which prices are not, in fact, reduced.” It also claims that consumers would make the same purchases anyway, just at different times, so it doesn’t really help businesses, and it hurts states’ tax coffers.
But NFIB says that coupled with back-to-school sales, the tax holiday will “help people get more bang for their buck” and will help the economic recovery.
From 12:01 a.m. Friday through midnight, Saturday, clothing and footwear are exempt from Mississippi’s 7-percent sales tax, provided no articles purchased are more than $100 each. For instance, you could buy three $50 shirts and get the break on sales taxes, but a $120 shirt would not qualify.
For more info from the state Department of Revenue on the sales tax holiday, go here.

Mississippi’s annual “sales tax holiday” for clothing and footwear begins Friday, aimed primarily at helping parents with back-to-school purchases.

I’ve received two correspondences on the holiday, one from a group saying it’s great, another saying it’s not.

The Mississippi chapter of the National Federation of Independent Businesses says it’s “a big help to small businesses amid a wobbly economy.” NFIB supported Mississippi’s tax holiday, which was passed by the Legislature in 2009 after years of debate.

Ron Aldridge, state director of the NFIB, said, “The sales-tax holiday puts people in the mood to shop, and we’re hoping they buy at least some of their school clothes … at small, locally owned businesses, because when you support small businesses, you’re supporting the community.”

But then Citizens for Tax Justice and the Institute on Taxation and Economic Policy has sent out a release saying, “Sales tax holidays make great politics but they don’t solve enduring problems. They fall short of accomplishing what advocates claim, that is, helping hard-pressed consumers or local retailers.”

The group said “more of the benefit goes to more affluent customers” because they have more discretion on when they spend their money and “There is also evidence of unscrupulous retailers holding fake sales in which prices are not, in fact, reduced.” It also claims that consumers would make the same purchases anyway, just at different times, so it doesn’t really help businesses, and it hurts states’ tax coffers.

But NFIB says that coupled with back-to-school sales, the tax holiday will “help people get more bang for their buck” and will help the economic recovery.

From 12:01 a.m. Friday through midnight, Saturday, clothing and footwear are exempt from Mississippi’s 7-percent sales tax, provided no articles purchased are more than $100 each. For instance, you could buy three $50 shirts and get the break on sales taxes, but a $120 shirt would not qualify.

For more info from the state Department of Revenue on the sales tax holiday, go here.

 


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