ATLANTA (AP) - Thousands of shoppers dashed to malls in more than a dozen states for back-to-school sales tax holidays, buying millions of dollars worth of clothes and school supplies -- and depriving states of much-needed tax revenue.
The tax holidays offer a financial relief valve to families grappling with high gas and food prices, and are a welcome tradition among retailers. But some lawmakers, economists -- and even some shoppers -- question why states are suspending sales tax es amid a slumping economy.
Several states have called off the event entirely. In Atlanta, Georgia Budget and Policy Institute director Alan Essig says the sales tax holiday is really more of a political gimmick than good economic policy. He says the big losers are state revenue and state services. Sixteen states and the District of Columbia hold tax holidays, usually one weekend a year in which clothing, classroom supplies and energy-efficient appliances are exempt from sales tax .
Tax holiday states are Alabama, Connecticut, Georgia, Iowa, Louisiana, Massachusetts, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Vermont, Virginia, and West Virginia.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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