Texas Annual Sales Tax Holiday: Costly Fool's Gold

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Dick Lavine /(512) 320-0222 x 101

August 15, 2011

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Schools, colleges, parks, social services, and other infrastructure are what make Texas a good place to live and work. Taxes are how Texans pay for these things. The state relies heavily on sales taxes, which take a bigger share of the income of low- and middle-income families. To try to make our tax system more fair, since 1999, Texas has held a sales tax holiday the third weekend of every August that temporarily suspends sales taxes for purchases of clothing, shoes, backpacks, and school supplies priced at less than $100. Sales tax holidays actually do little for low- and middle-income families, while costing Texas needed tax revenue. This Policy Point considers the sales tax holiday.