NRF Urges Tax Holidays

December 23, 2008  by in UnCategorized   

By Home Furnishings Business in on December 24, 2008 The National Retail Federation (NRF) is calling on President-elect Barack Obama to act quickly on a series of three sales tax holidays and other measures intended to boost retail spending, a sector of the economy that employs about one in five workers.

The tax holidays—applying to a broad range of goods including home furnishings—would take place in March, July and October.

“We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration,” states the letter to Obama from NRF officials, including the organization's chairman, J.C. Penney President and CEO Myron “Mike” Ullman III, and the top executives of PetSmart and Saks. “To be effective, any fiscal stimulus package must be enacted with great speed. It must be substantial. And it must be sustained.”

The NRF proposal includes both short-term economic stimulus measures and long-term investments. The letter states that sales tax holidays have proven to be a powerful inducement for people to shop. It proposes three 10-day periods in which sales taxes would not be charged, with the federal government reimbursing states for lost revenue. State sales tax rates range from 2.9 percent to 7.25 percent and add $236 billion a year to the amount consumers pay for goods and services, according to the U.S. Census Bureau. The NRF estimates the average family would save $175 in sales taxes if the proposal is enacted.

NRF also called for infrastructure investment in roads, rails, ports, public schools and renewable energy projects, saying it would have a double benefit of creating jobs and repairing systems that are critical to commerce.