Sales Tax Holidays: Politically Expedient but Poor Tax Policy V. 1

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1 Joseph Henchman, Sales Tax Holidays: Politically Expedient but Poor Tax Policy 1 (2012)

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)seph Henchman Executive Summary shopping. In 2012, 17 states will conduct sale
0c Pesdet 1 e t
tax holidays, down from a peak of 19 states i
ate Projects Sales tax holidays are periods of time when 20 10 (see Table 1).
selected goods are exempted from state (and
sometimes local) sales taxes. Such holidays have At first glance, sales tax holidays seem likc
become an annual event in many states, with great policy. They enjoy broad political suppo,
exemptions for such targeted products as back- with backers arguing that holidays are a highl)
to-school supplies, clothing, computers, hur- visible form of tax cut and provide benefits to
ricane preparedness supplies, products bearing low-income consumers. Politicians and other
the U.S. government's Energy Star label, and supporters routinely claim that sales tax holi-
even guns. High-tax New York State sparked days improve sales for retailers, create jobs, an,

the tf

to discourage border promotc