While sales tax holidays have been politically popular for a long time, they’ve seen a boost with lawmakers in several states this year as a way to share unanticipated surpluses with taxpayers. Although state budgets may be in unusual places this year, sales tax holidays remain the same as they always have been—ineffective and inefficient.
Seventeen states will hold a sales tax holiday in 2021, down from a peak of 19 in 2010, but above last year’s 16. This year, in addition to its regular tax-free weekend, Florida hosted a “Freedom Week” from July 1 to 7, exempting camping and outdoor hobby supplies from sales taxes. Tennessee increased its number of holidays by one, adding a year-long holiday for gun safety supplies beginning on July 1. Massachusetts Governor Charlie Baker (R) has pushed to extend the state’s holiday from a weekend to two months, but he does not appear likely to get this plan across the finish line.
Source Tax Foundation
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