Sales Tax Holidays: Timing Behavior and Tax Incidence.

Sales Tax Holiday;Tax Incidence;Timing;Computers;Economics;Business;Economics

Cole, Adam J.Slemrod, Joel B. ;

University of Michigan

关键词: Sales Tax Holiday;    Tax Incidence;    Timing;    Computers;    Economics;    Business;    Economics;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/63811/adamcol_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

A ;;sales tax holiday;; is a period of time, usually lasting a few days, during which state and sometimes local sales taxes are not levied on a set of goods, typically clothing, footwear, and school supplies.Prior to enacting, eliminating, or altering a tax holiday, policy-makers should understand from whence this policy came, how it spread, and the policy issues surrounding it.In this dissertation, I utilize this transitory reduction in the sales tax base to estimate the incidence of the sales tax and the timing behavior of consumer purchases.I first provide a narrative history of the sales tax holiday, a full description of each of the 118 different holidays held by 20 states and the District of Columbia from 1997 through 2007, and a discussion of the policy issues relevant to this popular state-level tax policy.In the second essay, I estimate the incidence of state sales taxes on computers by exploiting exogenous changes in tax rates due to sales tax holidays.Using scanner data that span nine tax holidays in 2007, I find that the sales tax is fully or slightly over-shifted to consumers.Demand is extremely responsive to small price changes during tax holidays.The quantity responses range from 5.76 to 16.53 more computers purchased per 10,000 people than would be predicted in the absence of the holidays.The timing response accounts for between 37 and 90 percent of the increase in purchases in the tax holiday states over the 30-week horizon.In the third essay, I investigate the effects of having sales tax holidays on state sales tax collections.Estimates indicate that tax collections decrease 0.52 percent to 7.83 percent during tax holiday months.Up to half of the revenue reduction is due to consumers;; timing purchases within the month to exploit the tax holiday.Extending a tax holiday by one day does not impact tax collections.Instead, the existence of the holiday appears to matter more than its duration, which reinforces the importance of the timing response of consumer purchases to this policy.There is no evidence of large substitutions of purchases across months.