01.29.08

Burr Introduces State Sales Tax Relief Bill

Alternative To Rebates Designed To Boost Consumer Spending, Stimulate Economy In April

U.S. Senator Richard Burr (R-NC) today introduced legislation encouraging states to suspend their sales tax as an alternative economic stimulus to the current rebate proposals being debated in Congress. The Sales Tax Holiday Act of 2008 would establish a national sales tax holiday for ten days beginning April 3rd to provide an economic boost for small businesses and consumers. Under the bill, states participating in the voluntary program would receive significant financial assistance from the federal government.

"The buying power of the American consumer is the best means we have for creating economic stimulus," Burr said. "Tax holidays have a strong track record of increasing consumer purchases and sparking economic growth. By giving people the incentive to shop, more money will be pumped in our economy, giving it the boost it needs."

The tax holiday would run from April 3rd through April 14th. The ten day period spans two full weekends of shopping before the April 15th tax deadline. The legislation encourages consumer spending to stimulate the economy at a time when the heavy federal tax burden is looming large on the minds of Americans. By temporarily removing the sales tax, the overall cost of goods and services would be reduced from 2.9% to 7% depending on the state sales tax percentage, increasing purchasing power and encouraging spending.

Under the measure, states could voluntarily suspend sales tax collection for ten days. The federal government would share the cost of lost tax revenue with participating states. States would be required to notify the Secretary of the Treasury by March 1, 2008 in order to qualify for federal assistance. The U.S. Department of the Treasury would pay participating state governments a total of sixty percent of lost tax revenue by July 1, 2008.