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Wednesday, July 29, 2009 - 11:26am

Sales-Tax Holiday A Tough Pill For State Budget

Consumers get to take advantage of a sales-tax holiday that begins at midnight, running through Sunday. But the break at the register for shoppers comes at a tough time for Georgia's ailing state budget.

With back-to-school around the corner, items like clothing, computers, and school supplies will be free of state and local sales taxes. The four-day period was renewed by lawmakers this winter, and is welcomed by retailers hoping to drive traffic to their stores.

But the tax-free holiday is a tough pill to swallow for those keeping tabs on Georgia's worsening budget.

Jack Hill is chair of the state Senate Appropriations Committee. He says Georgia will surrender $11- to $13-million in tax revenue this weekend. Hill says with the state's budget deficit of at least $900 million now, shoppers should feel lucky they have this opportunity.

"Things are a lot worse now than even what we thought they were then. I can assure you if we were voting today at lot of folks would have second thoughts about it."

Allen Essig with the Georgia Budget and Policy Institute says the sales-tax holiday period is essentially "feel-good window dressing" when it comes to the state's economy.

“The impact on the economy is negligible. (Concerning the) impact on the state budget, I think the priorities were skewed on a lot of the tax decisions that were made by the General Assembly last year.”

The break on local and state taxes applies to products that cost $1,500 or less and purchased for noncommercial home or personal use.