NRF repeats call for sales tax holidays

WASHINGTON The National Retail Federation has told the Senate that economic stimulus legislation under consideration fails to do enough for consumers, and repeated its call for a series of national sales tax holidays intended to jumpstart spending.

“While the legislation currently under consideration includes a number of provisions designed to produce long-term economic growth and job creation, we are extremely concerned that it does not do enough to immediately stimulate consumer spending or to preserve the tens of millions of jobs that consumer spending supports,” NRF SVP Steve Pfister said. “With consumer spending representing two-thirds of GDP, it is difficult if not impossible to foresee an improvement to overall economic growth until consumers regain confidence and resume spending.”

Pfister’s comments came in a letter to members of the Senate, which is currently debating amendments to the American Recovery and Reinvestment Act of 2009, the package of economic stimulus measures passed by the House last week.

NRF in December proposed that a series of national sales tax holidays be held during March, July and October 2009, each lasting 10 days including two weekends. Tax-free treatment would apply to all tangible goods subject to state sales tax except tobacco and alcohol, ranging from retail merchandise and restaurant meals to automobiles. 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 comparable revenue based on population.

NRF estimates that the proposed tax holidays could save consumers nearly $20 billion, or almost $175 for the average family, based on the $236 billion in sales tax collected nationwide each year. Beyond consumers saving money on already-expected purchases, retailers have reported sales increases of 35-40 percent from state-level tax holidays that have become popular in recent years.