NRF lobbies Obama for national sale tax holiday
-- Home Textiles Today, 12/29/2008 2:27:00 PM
Washington – The National Retail Federation today asked President-elect Barack Obama to incorporate a series of national sales tax holidays into upcoming economic stimulus legislation.
NRF argues that short-term gains from consumer spending is just as necessary to the economic recovery as job creation legislation aimed at creating long-term growth.
“To be effective, any fiscal stimulus package must be enacted with great speed. It must be substantial. And it must be sustained,” NRF said in its letter.
NRF proposed that tax holidays be held during March, July and October 2009, each lasting 10 days spanning two weekends. Tax-free treatment would apply to all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles but would exclude tobacco and alcohol. The federal government would reimburse the 45 states that have sales taxes for the lost revenue, and would provide the five states without a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) with revenue approximating the sales tax reimbursement that would be received by states with similar population.
State sales tax rates range from 2.9% to 7.25% and add $236 billion a year to the amount U.S. consumers pay for goods and services, according to the U.S. Census Bureau. By temporarily lifting the sales tax for the three 10-day periods, NRF estimated, consumers could save nearly $20 billion. Based on the 112.4 million households in the United States, the figure would amount to almost $175 for the average family, according to the organization.
NRF also supports infrastructure investment in roads, rails, ports, public schools and renewable energy projects.
NRF favored the economy stimulus checks delivered to consumers earlier this year. The trade and lobbying organization also favored a second round of stimulus checks, which the government ultimately did not issue.
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