Holiday on sales taxes in Tennessee

Holiday on sales taxes in Tennessee

July 26th, 2011 in Opinion Times

There's help at hand for consumers looking for a way to stretch already tight household budgets to cover the cost of many items youngsters need at the beginning of the school year. Tennessee's sixth annual sales tax holiday is scheduled Aug. 5-7.

There are rules governing the holiday, but they are straight forward. The holiday begins Aug. 5 at midnight and ends Aug. 7 at 11:59 p.m. During the reprieve, consumers are not assessed state or local sales tax on tax-free clothing, school and art supplies and computer purchases. The savings can be considerable, especially for families who must outfit several children for school or those who want to purchase a computer.

In Hamilton County, for instance, consumers can save almost 10 percent on covered items during the period. Georgians just across the border may also cross the state line to shop and to save. This year, they have reason to do so.

Georgia legislators -- despite strong pressure from retailers who favored the tax respite -- did not approve a sales tax holiday for 2011. They apparently did not want the state treasury to take the multimillion dollar hit the holiday would cost.

Tennessee, however, is willing to forego what is, after all, a relatively modest amount of money -- consumers saved close to $9 million last year -- in the state budget. It's a move that serves both the public and politicians. The former save money. The latter can claim, in truth, that they've done something positive.

For the most part, it's difficult to criticize the sales tax holiday. It certainly pleases a retail community still emerging from several difficult sales years. Consumers, particularly the working and middle classes, should enjoy the savings on items they always purchase at the beginning of the school year. And politicians can point to the good deed they've done for constituents and all state residents.

Still, there's an air of smugness and political self-congratulation surrounding the sales tax holiday, though it provides only temporary relief.

During the rest of the year, Tennesseans still are burdened by a tax code that forces many residents of modest means to spend a disproportionate share of their income on sales taxes rather than on necessities. The tax holiday is welcome, but meaningful tax reform that provides year-round relief would be much better.