The National Retail Federation last week sent a letter to President-elect Barack Obama requesting that national sales tax holidays be included in the upcoming economic stimulus legislation.
The NRF said it would be an important step toward rebuilding consumer confidence.
“We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration,” NRF said in the letter. “To be effective, any fiscal stimulus package must be enacted with great speed. It must be substantial. And it must be sustained. To accomplish this, the plan must include a longer-term investment designed to produce sustained economic growth through job creation as well as short-term economic stimulus aimed at increasing consumer spending.”
The Federation said that history has shown that tax holidays work. It suggested March, July and October as the months for implementation with each holiday running over 10 days, including two weekends. The proposal excluded tobacco and alcohol.
“Retailers’ considerable experience with sales tax holidays has shown that they provide a substantial inducement for people to shop,” the letter said. “To this end, we suggest a series of three national sales tax holidays that would cover a very broad range of goods.”
The letter was signed by NRF Chairman Myron E. “Mike” Ullman III (Chairman and CEO, JCPenney Co.), NRF First Vice Chairman Philip L. Francis (Chairman and CEO, PetSmart Inc.), NRF Second Vice Chairman Stephen I. Sadove (Chairman and CEO, Saks Inc.) and NRF President and CEO Tracy Mullin.
The federal government would reimburse the 45 states that have sales taxes for the lost revenue, the NRF said.
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