Cancel sales tax holiday? State lawmakers say ‘maybe’

Every August for the past 12 years, Texans have flooded stores on sales tax holiday weekend, supposedly spending like crazy to save about 8 percent off their bills thanks to a sales tax holiday enacted by the state legislature. The goal was to help low-income families prepare for back-to-school by stretching their dollars further, but it has become a spending orgy of sorts for lots of people by my observation.

With the state budget in shambles, and with public education facing billions in cuts — not to mention everything else to be trimmed — eliminating the sales tax holiday is expected to be on the legislature’s agenda in the next few days.

WFAA-TV reports that canceling the event, generally held in early August each year, could generate an additional $17 million this year; next year, analysts expect the state to gain more than $57 million, with another $41 million gain in 2013. I’m not sure why the numbers fluctuate so much, but the question is whether people who rush to stores on tax-holiday weekend will no longer spend as much because the sales tax wouldn’t be forgiven for school supplies, certain types of clothing and specific other items.

If you normally spent, say, $300 getting ready for school, this year for the same items would be paying $324.75 (including the 8.25 percent sales tax in Dallas County) — so would you spend $324.75 anyway, or would you cut out $25 in spending to keep the cost at $300?

And how much impact would the change, if enacted, have on neighborhood businesses?


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