Sales tax holidays gone until 2025
<p class="p1">Louisiana’s three state sales tax holidays may not return until 2025, but there is expected to be an attempt at next year’s legislative session to bring them back. Legislators need to spend the intervening time weighing the pros and cons of those holidays.</p><p class="p3">The end of the holidays are a consequence of eliminating 94 of the state’s 204 state sales tax exemptions when lawmakers approved a 0.45 percent increase in the state tax to replace an expiring 1 percent temporary tax.</p><p class="p3">An analysis by The Advocate found the annual Louisiana Sales Tax Holiday that had been scheduled for this coming weekend was the most successful of the three tax breaks. It would have cost the state $4.7 million. The purchase of school supplies was the reason for the high cost when compared to the other two holidays.</p><p class="p3">The Second Amendment Sales Tax Holiday that would have taken place Sept. 7-9 would have cost the state $404,000. The Disaster Preparedness Sales Tax Holiday that would take place May 25-26, 2019, would cost the state $68,000. It seems obvious that those two holidays should definitely stay off the books.</p><p class="p3">The Advocate said both the Tax Foundation in Washington, D.C., and the Public Affairs Research Council of Louisiana said the three holidays haven’t spurred additional retail sales in the 17 states where they are held. They also complicate a state sales tax system that is in serious need of reform.</p><p class="p3">Robert Scott, president of PAR, said, “A lot of motivations for the sales tax holidays, why they are passed, has less to do with saving consumers money and more about the political statements that are made.” Scott said the Second Amendment holiday, for example, gives lawmakers a chance to cast a vote in support of that amendment.</p><p class="p3">An effort by Rep. Stephen Dwight, R-Moss Bluff, to reinstate the sales tax holidays was defeated during House debate on a Republican-backed sales tax increase that was rejected because of Senate changes.</p><p class="p3">We urge legislators to give serious consideration to removing even more state sales tax exemptions at next year’s fiscal session. It would be a great way to start reforming the state’s complex and broken tax system and lower the state sales tax.</p>