The Federation of Tax Administrators (FTA) has a list of most of these holidays. California has no sales tax holidays which is a good thing. [Well, that really isn't true because there are some goods that should have sales tax applied, such as digital goods purchased by individual consumers, entertainment and personal services, that enjoy a year round sales tax holiday.]
There is a news story today that caught my eye because it is just odd - the West Virginia House of Delegates passed a bill (HB 4521) calling for a sales tax holiday on guns purchased during the first weekend in October. The story from The State Journal ("Delegates approve gun sales tax holiday," 3/4/10) notes that the state might make up the lost revenue from the increased sale of ammunition and other items sold by gun stores!
The article and FTA list note that a few states already have a gun sales tax holiday.
- This is just odd - why single out guns and exempt them from tax for two days?
- Isolated and short-term exemptions are poorly targeted to provide relief to taxpayers who need it. Even a very wealthy person who can easily afford to pay sales tax on his/her gun purchase gets the exemption.
- It is complicated for vendors to deal with due to extra recordkeeping.
- A tax break for one group of taxpayers means that others will pay more, assuming revenue neutrality.
- Where will it stop? Other groups will step forward seeking a holiday for items purchased by their members.
- Vendors of goods subject to the sales tax holiday surely enjoy high sales during the holiday. What happens to them for the rest of the year?
The Tax Foundation has a great report explaining sales tax holidays "as politically expedient, but poor tax policy" (8/09) - here.