Chicago— Lt. Governor Pat Quinn was joined by David Vite, President of the Illinois Retail Merchants Association pushed for legislation to create an annual “back-to-school sales tax holiday”. The proposal – which has been successful in other states – eliminates the state’s portion of the sales tax on school supplies, clothing and computer equipment beginning the first Friday of every August and continuing for nine days.
Consumers in 11 states and the District of Columbia have enjoyed similar sales tax holidays for several years. In addition to easing the burden on working families, the sales tax holiday has been a shot in the arm for local businesses.
Under Quinn’s proposal, the state’s portion of the sales tax (5 percent) is waived on school supplies up to $50, clothing up to $100, and computers and software up to $3,000. County and municipal governments could opt in to the holiday regarding their locally-imposed sales taxes.
“Back-to-school shopping is an expensive August ritual for many Illinois families, and a nine-day sales tax holiday can provide a little relief. And owners of businesses across the state welcome a boost during the lazy days of summer,” said Quinn, who as Lt. Governor administers the Illinois Main Street program.
The sales tax holiday plan earned the support of the Illinois Retail Merchants Association (IRMA). “Retailers agree that a state tax holiday would be an excellent way to stimulate the economy and help consumers,” IRMA President Vite said. “We have seen it work in other states.”
Sen. James Clayborne (D-East St. Louis) and Rep. Jack Franks (D-Woodstock) will sponsor the back-to-school sales tax holiday plan in the upcoming legislative session.
“A parent who spends $100 on school clothes and supplies can save some of their hard-earned money under this back-to-school sales tax holiday plan,” Sen. Clayborne said. “Let’s not encourage Illinois moms and dads to go to consumer-friendly states such as Missouri or Iowa to do their shopping.”
“From State Street in Chicago’s Loop to Woodstock Square, retailers are delighted about the commercial stimulus of a sales tax holiday,” Rep. Franks said. “This is a win-win for business and consumers, and should earn broad, bipartisan support.”
A back-to-school sales tax holiday ranging from two to nine days is in effect in Connecticut, District of Columbia, Florida, Georgia, Iowa, Massachusetts, Missouri, New Mexico, New York, North Carolina, South Carolina and Texas, and will go into effect in 2006 in Maryland and Tennessee. In Massachusetts, the holiday applies to all retail products.