DALLAS (WBAP/KLIF News) — Another state sales tax holiday is coming next month but a newly released report from the Tax Foundation argues these sales incentives actually fail to boost sales while reducing state revenue.
The report claims tax holidays merely encourage consumers to shift their spending rather than increase it. The Tax Foundation concludes that the holidays hurt state revenue and Texas would be better off reducing the sales tax rate on a year-round basis.
George Kelemen doesn’t agree. He’s the president and CEO of the Texas Retailers Association. He says sales tax holidays do generate more overall sales, some of it from consumers from neighboring states. That, he claims, more than makes up for any revenue lost by the state over the holiday weekends.
The San Antonio Express-News reports the lure of tax savings for customers across state lines has diminished since all four states that border Texas have adopted similar tax holidays.
There are three tax holiday weekends each year in Texas, one in April to urge residents to prepare for the spring severe storm season, one in May to promote energy saving appliance purchases and the back to school sales tax holiday, which will be August 11 through 13 this year.
A list of items exempted from sales tax that weekend can be found at comptroller.texas.gov.
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