Feb 28, 2011

Legislators, Retailers Like Sales Tax HolidayBy Gray RohrerSunshineStateNews.com

Touting a study showing that sales tax holidays on some items lead to increased revenues for the state, retailers urged legislators Thursday to install another such holiday ahead of the 2011-2012 school year.

Rick McAllister, president and CEO of the Florida Retail Federation, pointed to a study from the Washington Economics Group, a Florida-based economics and business consulting firm, which showed that the three-day sales tax holiday in August 2010 generated $115 million more in taxable sales than the same weekend the previous year, when there was no tax holiday. He said that because sales taxes are only lifted on a limited number of items — school supplies and clothing items under $50 — it draws customers into stores who buy other taxable items.

“The fact is, it stimulates buying in those taxable areas,” McAllister said.

Legislators implemented the first sales tax holiday in August 1998 in order to give families a chance to gear up ahead of the school year. As the recent recession hit Florida’s revenues hard, the sales tax holidays were lifted in 2008 and 2009 as legislators looked after the state’s bottom line.

“Frankly, in years they didn’t (have the holiday), they were concerned about the loss in tax revenue,” McAllister said.

Now, legislators are hoping to bring back the sales tax holiday this year. Sen. Ellyn Bogdanoff, R-Fort Lauderdale, and Rep. Elizabeth Porter, R-Lake City, have filed legislation for a sales tax holiday throughout Florida during the third weekend in August.

“We have to strengthen the retail sector for our state,” Porter said.

Despite the added benefit for Florida’s revenues and favorable legislation in the works, retailers may not be getting everything they want regarding the sales tax holiday. McAllister would like to see a 10-day holiday, encompassing two weekends, in order to give families that get paid biweekly more of a chance to take advantage of the savings.

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