Sales Tax Holidays

An article from the tax foundation takes a look at the effectiveness of tax holidays. Tax holidays are specially designated periods of time where the state government forgives sales tax on certain items. Items can include clothing, back to school supplies, hurricane preparedness items, etc. These holidays have a certain political appeal, but as the article points out, they are actually riddled with problems. They do not promote economic growth but simply change the timing of when they are purchased; they create complex tax codes; many businesses raise prices during the holidays; the cost of complying is often more than the benefit that a business receives–the list goes on.

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