The National Retail Federation is asking President-elect Barack Obama to add a series of national sales tax holidays in the anticipated economic stimulus legislation. The federation says such holidays would be an important step toward rebuilding consumer confidence and that short-term gains from consumer spending and long-term growth from job creation are both needed to achieve economic recovery.
“We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration,” the NRF said in a letter to Obama.
The letter says the situation is critical and that an effective stimulus package must be enacted quickly and be substantial and sustained.
The NRF proposes the tax holidays be held in March, July and October 2009 and that each lasts 10 days and includes two weekends.
The federation suggests tax-free treatment apply to all tangible goods subject to a state sales tax, ranging from apparel and home furnishings to restaurant dining and automobiles, but that it excludes tobacco and alcohol.
The retail federation suggests that the federal government reimburse the 45 states that have sales taxes for lost revenue on the holidays. It also says the government should provide the five states without a sales tax – Alaska, Delaware, Montana, New Hampshire and Oregon – with revenue approximating the sales tax reimbursement that would be received by states with similar populations.
The letter was signed by NRF Chairman Myron Ullman III, who is chairman and CEO of the JCPenney Co. Retail federation members Philip Francis, CEO of PetSmart Inc.; Stephen Sadove, chairman and CEO of Saks Inc.; and NRF CEO Tracy Mullin also signed the letter.
