When is mo tax free weekend 2017

Such holidays have become an annual event in many states, with exemptions for such targeted items as back-to-school supplies, clothing, computers, hurricane preparedness supplies, products bearing the U.

New York State, which is known for high state taxes, sparked the trend in as a way to discourage border shopping. In , 16 states will conduct sales tax holidays, down from a peak of 19 in and unchanged since last year see Table 1. In its budget bill, Tennessee established a second sales tax holiday, to be aimed at restaurants. At first glance, sales tax holidays seem like great policy. They enjoy broad political support, with backers arguing that holidays are a highly visible form of tax cuts and provide benefits to low-income consumers.

Politicians and other supporters routinely claim that sales tax holidays improve sales for retailers, create jobs, and promote economic growth. Despite their political popularity, sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform.

Sales tax holidays introduce unjustifiable government distortions into the economy without providing any significant boost to the economy. They represent a real cost for businesses without providing substantial benefits.

They are also an inefficient means of helping low-income consumers and an ineffective means of providing savings to consumers. Sales taxes are a type of consumption tax, or a tax on spending on goods and services purchased by the end user. The principle underlying the use of sales taxes to fund government is that individuals should pay taxes in proportion to the benefit they receive from government spending; this idea is known as the benefit principle.

Personal consumption is considered an appropriate proxy for the amount of government services consumed by an individual. Thus, a tax on consumption is considered an equitable method of paying for government services.

Many economists also prefer a consumption tax over an income tax because consumption taxes do not tax and thereby discourage savings. Sales taxes in the United States are consumption taxes, but they largely exempt certain transactions, such as higher education, housing, and health care.

A properly structured sales tax, however, would tax all consumption by end users including services that are currently excluded. Broadening the sales tax base while lowering the sales tax rate would mitigate both volatility in revenue collections and the economic harm caused by a high tax rate. A high tax rate increases distortions in the market and can inhibit growth by making a state less attractive for individuals and businesses.

Another important feature of good sales taxes is that they tax consumption once and only once. Business inputs, or business-to-business purchases that are used to create other products or services, should be excluded from the sales tax base.

Otherwise, final products will be taxed multiple times: once or more during production and again when purchased by the end user. In practice, this multiple taxation unfortunately occurs in many states. Sales taxes tend to be inherently regressive with regard to income, as low-income individuals tend to spend a greater percentage of their income in taxable sales than high-income individuals.

In an effort to reduce this regressivity, items viewed as basic necessities, such as groceries, utilities, clothing, and prescription drugs, are often exempted from sales taxes in the United States. But these exemptions also benefit high-income taxpayers, while narrowing the base and necessitating a higher tax rate. Ideally, sales tax reform would broaden sales tax bases while lowering sales tax rates, to produce a system that collects stable revenue with minimal economic distortion.

Sales tax holidays are an example of the opposite—base narrowing—in that they carve out exemptions for certain transactions during certain time periods. Ohio and Michigan enacted the first sales tax holidays in when they offered one-time tax holidays for automobile purchases.

But it was New York that sparked the modern trend, with the first sales tax holiday for clothing in While sales tax holidays are often defended on grounds of economic benefits, in reality, a key motivation has been attempting to stop cross-border shopping, and perhaps even lure shoppers from other states. Since the inception of sales tax holidays, many states have created them around certain products and industries.

See Tables 2 and 3 for a chronicle of sales tax holidays. A number of states have tried sales tax holidays and then canceled them, a trend that accelerated during the recession and its related state government revenue downturn, although the number has remained more stable since, only fluctuating by about one holiday a year. Florida and Maryland canceled their holidays after that year but have reinstated them since. Massachusetts canceled its holiday after it hiked its sales tax from 5 percent to 6.

In , however, Massachusetts established a one-time sales tax holiday just ten days before the holiday was planned to start, and reinstated the annual holiday from onward in a separate bill. In , the District of Columbia, faced with declining revenue and a widening budget shortfall, announced the one-year suspension of its August sales tax holiday only weeks before it was scheduled to occur, later repealing it permanently.

Meanwhile, Florida, having skipped holidays in and , returned to having a tax holiday in Georgia canceled its annual holidays in In July , North Carolina approved legislation ending future sales tax holidays, using the revenue instead for broad-based tax relief. In , Massachusetts canceled its sales tax holiday traditionally held in August , citing a lack of revenue as reason for its hiatus. As part of the sales tax changes, the state also suspended its sales tax holidays for seven years, so while the May holiday had already occurred in , the August and September holidays did not.

In , West Virginia passed legislation to create a sales tax holiday in Supporters claim that sales tax holidays stimulate the economy. Rather than stimulating new sales, sales tax holidays simply shift the timing of sales. Anecdotal evidence from other states supports these conclusions. Other evidence suggests that sales tax holidays attracted cross-border sales only when other states did not have their own holidays, which is no longer the case.

The increase in tax revenue would be far outweighed by the lost revenue from the much larger amount of tax-free purchases. Job creation is a frequent argument in support of sales tax holidays. But this argument suffers from the same problems as the argument based on general economic growth. Any increase in employment will be modest and temporary, limiting the benefits.

Temporary increases in labor associated with sales tax holidays are costly for businesses, more so than an equivalent increase spread over the whole year, because of the fixed cost associated with hiring and training multiple temporary employees. By focusing on encouraging a few days of temporary employment during sales tax holidays, lawmakers lose sight of and undermine policies that promote long-term economic growth and job creation.

Not every state is convinced of the merits of such holidays. Sales tax experts and economists widely agree that there is little evidence of increased economic activity as a result of sales tax holidays. But experience shows that the claims of economic stimulus, increased revenue, and consumer savings are greatly exaggerated. States see little net economic activity as a result of sales tax holidays; the holidays instead represent a costly-to-administer revenue loss for the government.

In the midst of the coronavirus crisis, some states are hoping that a sales tax holiday might help restart struggling industries by stimulating the economy. As mentioned earlier, Tennessee has created a second sales tax holiday, targeted specifically at food and drink purchases from restaurants. It is possible that shifting sales forward could help some struggling retail businesses, but the sudden economic halt was caused by a public health crisis—not a lack of desire for consumer spending.

People may want to spend money on travel, restaurants, or related industries, but are unable to do so safely right now. Different locations face different levels of risk. If, on the other hand, a sales tax holiday actually influenced people to go to restaurants who would not have done so otherwise, that would mean people are making choices that they previously thought were unsafe.

Such decisions should not be driven by sales tax policy. Retailers, moreover, need a consistent increase in demand, not one poorly socially distanced week or weekend of higher sales volume followed by a reduction compared to normal volume in subsequent weeks.

Sales tax holidays usually apply only to a specific list of products, such as school supplies, sports equipment, clothing, and computers. The number of categories has expanded in recent years to include specific appliances, hurricane preparedness supplies, and even firearms.

Restaurant owners in Massachusetts have even pushed for a prepared food sales tax holiday. Politicians single out specific populations or industries and bestow targeted tax breaks on them. Such discrimination among products distorts consumer spending and reduces market efficiency by favoring certain products over others.

For example, the New Mexico sales tax holiday exempts computer microphones but not headsets, blank painting canvases but not dry erase boards, and backpacks but not duffel bags. The sales tax holiday raises the price of these items relative to backpacks and so students are influenced to purchase the backpacks. Though they save a little money on the purchases, they end up with less suitable products that they may not have purchased in the absence of the holiday.

Likewise, a low-income elderly or childless couple may not have a need for school supplies, a computer, or sports equipment, but presumably they are as deserving of tax cuts as a consumer purchasing any of the exempt products.

It begins at a. What is exempt from the Sales and Use Tax during the holiday? Generally, exempt items include: clothing and accessories; footwear; school supplies used for school assignments; computers, software, and printers; certain bed and bath supplies. Check out the shopping lists on this page for examples of exempt and non-exempt items. What is not exempt from the Sales and Use Tax during the holiday?

The exemption does not apply to: items for use in a trade or business; items placed on layaway or a similar deferred payment and delivery plan; clothing and footwear rentals; cosmetics; eyewear; furniture; jewelry. If I buy an eligible item online, is it still exempt? As long as the item is eligible and the sale occurs during the holiday, online purchases are tax-free.

What counts as a school supply? School supplies are items used in the classroom or at home for school assignments. School supplies include, but are not limited to, pens, pencils, paper, binders, notebooks, books, backpacks, lunchboxes, and calculators. Items such as refrigerators and toiletries purchased by college students are not used for school assignments and are not exempt. Similarly, these items purchased for office, business, or non-school use are not exempt. Are musical instruments exempt?

What about books? Yes, books and musical instruments are exempt, provided that they are used for school assignments. Text books are already exempt from Sales Tax, but other books used for school like dictionaries and books used for book reports and reading assignments are exempt during the Sales Tax Holiday. I know computers are exempt, but what about smartphones, tablets, and other technology?

Cell phones, smartphones, or other handheld devices that make phone calls are not exempt. Neither are handheld devices that are primarily used to download and listen to music, download and watch videos, or download and read books. What kinds of computer accessories are eligible? Since the law includes computers but not computer supplies as eligible, a computer monitor, keyboard, or mouse sold by itself is taxable during the holiday period.

These items are only exempt if they are used for school assignments and can be considered a school supply, or if they are purchased in a package with the computer itself.

Digital music players, digital cameras and cell phones or smartphones are not exempt regardless of whether they are purchased with a computer. Which retailers participate? All retailers who sell eligible items participate in the Sales Tax Holiday and may not collect Sales Tax from their customers on eligible purchases. The term shall not include watches, watchbands, jewelry, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, or belt buckles; and.

The term shall not include watches, radios, CD players, headphones, sporting equipment, portable or desktop telephones, copiers or other office equipment, furniture, or fixtures. Missouri Department of Revenue. Login Login.