Pushing for a back-to-school sales tax holiday in August 2011, Florida retailers Thursday hailed a new study showing that last year’s three-day relief period actually put $7 million extra into state coffers.
The Washington Economics Group (WEG) reported that during the Aug. 13-15 holiday during which sales taxes weren’t collected on certain school-related items, people bought a whole lot of other things not covered by the tax holiday.
During the period, the study found that sales of other taxable items were $115 million higher than taxable sales during the same weekend the previous year, which had no holiday. The extra taxes collected on those sales, after factoring in lost revenue for the tax holiday, still left the state with $7 million more than it otherwise expected to have.
In 2008 and 2009, the back-to-school tax break was suspended, with lawmakers citing lost tax revenue as the reason, despite claims at the time by retailers that such tax holidays would actually boost revenue.
Rick McAllister, president and CEO of the Florida Retail Federation, said the WEG report “puts hard data on a fact that retailers have known for some time.”
WEG found that sales projections for August 2010 were surpassed by $289 million.
“It’s not only great for Florida’s families,” said McAllister, “but for Florida’s bottom line.”
Sen. Ellyn Bogdanoff, R-Fort Lauderdale, and Rep. Elizabeth Porter, R-Lake City, are sponsoring bills to hold the holiday again this August. Although McAllister noted that state revenues would be greater if the holiday were ten days instead of three, Bogdanoff said that wasn’t likely to happen.
