According To The Tax Foundation “Sales tax holidays, designated periods when select goods or services are exempted from state (and sometimes local) sales taxes, continue to be politically popular among the states: 19 have held or will be holding sales tax holidays in 2024, one more than last year.

They also take different forms in different places. In recent years, Florida has exempted outdoor recreational equipment from its state sales tax during the summer, while Iowa and Oklahoma have exempted clothing during their holidays. Sales tax holidays are politically popular with elected officials because they offer direct discounts, whether real or perceived, to consumers in a highly visible way. Consumers often believe they’re getting a good deal. Thus, they remain popular despite their economic inefficiencies, unintended consequences, and frequent inability to achieve their stated goals.

Proponents of sales tax holidays claim they create economic growth by increasing retail activity within their timeframes. However, studies show that much of the increased shopping during holidays is shopping that consumers would have done at other times but moved to the holiday timeframe to take advantage of discounts. While some consumers make incidental “impulse” purchases during these holidays, those additional purchases are not enough to justify the revenue costs associated with these holidays, even if such impulse purchases are desirable. Since sales tax holidays shift the timing of demand but do little to increase its magnitude, sales tax holidays reduce state and local tax collections for little or no economic benefit.

Go To Tax Foundation To Read Article: https://taxfoundation.org/data/all/state/sales-tax-holidays-2024/