Georgia retailers are fighting to bring back the sales tax holiday this year. The lobbying effort comes despite state lawmakers’ reluctance, and the Tax Reform Council’s recommendation, to not bring it back.
State economist Ken Heaghney says overall sales tax revenue, along with income tax collections, continue to improve. But because Georgia’s budget is in such a deep hole, it could take another three years to return to a prior peak of general revenue.
Heaghney says Georgia lost $13 million during its last sales tax free weekend in 2009—thus lawmakers’ reluctance to bring it back in still tough budget times:
“With no reserve, or very small reserve fund, it’s really a dollar for dollar tradeoff between reduction in taxes—which the sales tax holiday would be—or a reduction in spending for other things the state does.”
But the Georgia Retail Association says its study shows the state makes money—a net of $20 million. The group’s John Heavener says that’s due to several reasons, if only one looks at the retail supply chain:
“The amount of freight involved in moving the new goods into the market for that weekend by transportation—by our distribution centers in the state—all increase the volume for that weekend. Both fuel taxes and payroll taxes.”
And, Heavener says higher consumer traffic brings increased sales of items not included on the tax holiday list.
Heavener says 16 other states still have tax holiday weekend, including all surrounding Georgia. And he plans to show state lawmakers a study in Florida, which he says brought back its sales tax holiday after a two year hiatus--and made money.
Heavener admits it's still an uphill battle to convince lawmakers, but his group wouldn't be at the state Capitol makig the push if it didn't think there was a chance.