National Retail Federation Asks Obama For National Sales Tax Holiday
The National Retail Federation (NRF) has asked President-Elect Barack Obama to consider National Sales Tax Holidays as part of his economic stimulus plan. The NRF wants the tax holidays be held during March, July and October 2009 with each lasting 10 days including two weekends. They want tax-free treatment on all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles but to exclude tobacco and alcohol. The NRF's idea has the federal government reimbursing the 45 states that have sales taxes for the lost revenue and providing the five states without a sales tax with revenue approximating the sales tax reimbursement that would be received by states with similar population.
Tax-free days are popular with shoppers in individual states when they are run. Some states have a tax-free period for back-to-school shopping. At least thirteen states run tax-free holidays according to this article which is a couple years old. The article quotes an NRF spokesperson as saying tax-free holidays are very successful and boost spending.
"Sales tax holidays are tremendously successful," said Craig Shearman, spokesman for the National Retail Federation. He has heard of sales gains of 10 percent to 100 percent during these holiday periods, but believes the actual number is somewhere in between.
For consumers, the holidays may have a significance greater than any actual savings.
It's the idea simply of "not paying sales tax," Shearman said. "Americans have hated paying taxes all the way back to the Boston Tea Party."
It's an interesting idea. It is a way of giving consumers a tax break providing taxes aren't raised to pay for it. If the NRF's plan is implemented by the Obama administration as part of 2009 stimulus plan then common sense dictates that the the National Sales Tax Holidays will be the most popular with consumers living in states that have the highest sales tax.
You can read the NRF's press release here and the letter and stimulus proposal here (PDF file). (via Retailer Daily)
