July 18, 2023

Sales tax holidays may not help as much as you think

Talia Blake writes:

"Shoppers in Florida will be saving at the cash register later this month.

The two week long Back-To-School sales tax holiday begins on July 24, 2023.

Sadaf Knight, CEO of Florida Policy Institute [emphasis added], tells WMFE's Talia Blake that you may not be saving as much as you think.

Talia Blake: With inflation and all the other expenses families are dealing with, how much do these sales tax holidays actually help consumers? How effective are they?

Sadaf Knight: They're not as effective as you think they might be. When we do the research and look at who utilizes the sales tax and what kind of relief they provide, they don't actually promote economic growth or increase purchases by consumers, or provide targeted tax relief the way that we might expect. So, they do cost the state in terms of revenue that they're not collecting. But, there's better ways to provide relief to families in Florida who are facing issues like inflation and the rising cost of living.

Talia Blake: You said that consumers don't really get the benefit they think they're getting. So what about businesses? How do sales tax holidays impact businesses here in the state?

Sadaf Knight: Many people say that these periods where they don't collect sales tax actually increase economic activity, provide a boost in terms of retail, but that's not been found when we look at the research. They don't really encourage people to shift their spending habits in any way or the timing of their spending to fall within these timeframes to match up with when the exemptions are happening."

Read the full transcript at

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