Menu
Tax Notes logo

ITEP: COVID-19 Exposes Inefficacy of Sales Tax Holidays

Dated July 30, 2020

SUMMARY BY TAX ANALYSTS

The Institute on Taxation and Economic Policy published a brief critiquing the usefulness of sales tax holidays and their effect on state revenues, arguing that the COVID-19 pandemic has put into perspective how the limited tax incentive periods offer marginal benefits to low-income taxpayers while costing state and local governments millions of dollars that must be recouped elsewhere.

The brief concluded that temporarily exempting a small list of items does nothing to offset the regressive nature of sales taxes.

Copy RID