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Will Wisconsin Have Sales Tax Holidays in 2014?

  • Jan 17, 2014 | Gail Cole

 Will Wisconsin lawmakers approve a sales tax holiday for school supplies in 2014?

Last year, approximately 17 states offered sales tax holidays. Each tax-free period has its own theme: some exempt school supplies and computers, some clothing and footwear. Certain states provide tax-free periods for energy efficient products to encourage folks to replace energy-eating older appliances. Virginia, which frequently gets hit by strong storms, offers a tax-free period for emergency preparedness supplies. And Louisiana, whose citizens feel strongly about the rights of citizens to bear arms, has a Second Amendment Sales Tax Holiday.

You get the picture. Sales tax holidays have been called “politically expedient but poor tax policy.” According to the Tax Foundation, a think tank dedicated to educating taxpayers about smarter tax policy:

“Most sales tax holidays involve politicians picking products and industries to favor with exemptions, arbitrarily discriminating between products and across time, and distorting consumer decisions.”

Yet politicians do not all immediately vote in favor of sales tax holidays. Consider the news from Wisconsin.

The news from Wisconsin

Wisconsin Assembly Bill 108 would create:

  • An annual sales-tax holiday for certain clothing, computers, school instruction materials and school supplies during “the two-day period beginning on the first Saturday in August and ending on the following Sunday….”
  • A two day sales tax holiday beginning the first Saturday in November and concluding the following Sunday for “sales of Energy Star products purchased by a consumer for the consumer’s personal use….”

These tax-free periods would Department of Revenue determines, no later than May 1, that the state’s financial situation would make the implementation of the temporary exemptions imprudent.”

The sales tax holiday is thought to have a good chance of being accepted if the state’s budget looks good (a budget report is expected soon). Walmart and Apple have reportedly lobbied for it, though neither company set a representative to the recent hearing on the tax-free period.

The sales tax holiday was proposed in 2013 by Republicans but not all Wisconsin Republican lawmakers support it. Representative Michael Schraa (R-Oshkosh) worries that a sales tax holiday “would put a burden on small business owners who would have to reprogram their cash registers to not charge sales tax.”

“The customers love sales tax holidays.”

At least one retailer is not talking about the burden a tax-free period would create. Frank Julian, vice president for Macy’s, wants Wisconsin to enact the sales tax holidays. Customers love them, he says. And according to the bill’s sponsors, “savings will also attract buyers from other states.”

Popularity isn’t everything

Still, the Wisconsin Department of Revenue estimates that the August sales tax holiday would “decrease state sales/use tax collections by $11.9 million on an annual basis.” The November sales tax holiday would likely “decrease state sales/use tax collections by $2.6 million annually.” Surely lawmakers will consider that as they cast their votes for or against a Wisconsin sales tax holiday.

How does your business handle sales tax holidays?

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.