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.