US Sales Tax Holiday Plans Still Stalled

by Mike Godfrey, Tax-News.com, Washington

27 November 2001

As the wrangling over a proposed 10 day sales tax holiday to stimulate Christmas spending continues, even the bill's lead sponsor, Democrat Senator Patty Murray is losing hope.

Under Senator Murray's plans, the 45 US states which impose sales taxes would be permitted to declare a sales tax holiday on the vast majority of purchases (with the exception of alcohol and tobacco products) in order to stimulate retail activity and boost the country's ailing economy.

However, the proposal has become entangled in partisan disagreements about the overall shape of the economic stimulus bill, and the chances of disentangling it before the end of the festive season look slim. 'This is a grassroots thing,' observed Senator Murray. 'Leadership bought into their own packages.'

Although she is trying to remain cautiously optimistic, and has said that a tax holiday would make sense in January if the economy is still in poor shape, Murray has reluctantly warned US citizens not to put off their Christmas shopping any longer, echoing the sentiments of House Small Business Committee Chairman Don Manzullo, who spoke last week on the same topic.

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