Sales-tax holiday

Thursday, December 16, 2004

Whether or not last August's sales-tax holiday benefited the cities and counties that participated awaits a Department of Revenue analysis not yet completed. Certainly the holiday was a boon to consumers, who crowded stores for three days last summer to buy tax-free school supplies, including clothing and computers.

Sponsored by Senate President Pro Tem Peter Kinder of Cape Girardeau, the legislation creating the state's first tax holiday waived sales taxes on school supplies for three days. Kinder's bill gave counties and cities the choice of participating or not. Last August, 119 of 571 cities and 66 of 114 counties opted out of the holiday.

Now state senator-elect Jason Crowell of Cape Girardeau has prefiled a tax-holiday bill for the coming legislative session that would establish an annual holiday that would be mandatory for all cities and counties in the state.

Backers of the tax holiday believe it benefits cities and counties by spurring purchases of non-school items and by attracting customers from border states. But the Missouri Municipal League argues that some cities had to opt out of the holiday to stay within their budgets. The league and the Missouri Association of Counties would prefer a law that allows cities and counties to opt-in on the holiday if it makes financial sense rather than being forced to make the unpopular decision to opt out.

Crowell's bill may seem premature in the absence of a final economic analysis. But those calculations should be complete well before the bill comes up for a vote and certainly should go far in determining for legislators whether or not a sales-tax holiday is good for Missouri.

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