Should Sales Tax Holidays Get a ‘Permanent Vacation’?

By Jon Gargis 

Shoppers in Georgia will be getting a reprieve on a number of back-to-school items during this weekend’s sales tax holiday. But at least one national organization wants to see such suspensions in taxes given a permanent holiday.

The non-partisan Tax Foundation says tax-free weekends and other similar programs “impose significant costs on both groups without yielding significant benefits.” A report from the Washington, D.C.-based group says the holidays “do not promote economic growth or significantly increase consumer purchase.
“[T]he evidence shows that they simply shift the timing of purchases. Some retailers raise prices during the holiday, reducing consumer savings,” the report states.

According to the foundation, 17 states, including Georgia, are holding sales tax holidays this year.

“Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief.” Tax Foundation Vice President for Legal & State Projects Joseph Henchman said in the release. “If a state has to offer a ‘holiday’ from its tax system, it’s a sign that there’s a problem with the system itself. If politicians want to save money for consumers, then they should cut the sales tax rate year-round.”

Do you think sales tax holidays should remain in place, or do you want to see them come to an end? Tell us in the comments.