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The Institute on Taxation and Economic Policy (ITEP) did some aggressive media outreach to get the word to consumers and retailers that sales tax holidays are more political PR than smart economic policy. In fact, we earned a front page article in USA Today headlined “Critics say states should discontinue tax holidays.” The article elaborates on ITEP’s argument that these holidays aren’t well targeted to the working families they claim to help: “low-and middle income families don’t have the discretionary income or time to shop only on the tax holidays.” USA Today then notes ITEP’s recommendation of targeted tax credits to ensure that tax relief gets to families most in need.
Our press release also proposes states work to implement laws requiring online retailers to collect state sales taxes so brick and mortar stores can compete. After all, sales tax holidays don’t benefit local retailers much more than they benefit consumers.
Of course, the fairness concerns are only one reason why sales tax holidays aren’t all they’re cracked up to be. ITEP’s policy brief on the issue highlights the cost, administrative difficulties, and impact of unscrupulous retailers as other reasons why organizations, policymakers, and consumers should be joining the ITEP effort against sales tax holidays.