August 28, 2000
Michigan shoppers - especially families making back-to-school purchases - would have started saving big today if state legislators had enacted a proposed sales tax holiday on clothes.
House Bill 4862, which cleared the House Tax Policy Committee by a 16-0 vote on May 9, would eliminate the sales tax on all clothing and footwear items priced up to $150 during the two-week period surrounding Labor Day.
"It didn't happen this year, but we're continuing to work with lawmakers to enact the bill for 2001," said Larry Meyer, CEO of the Michigan Retailers Association (MRA). "The legislation sponsored by Rep. Nancy Cassis (R-Novi) provides a targeted tax cut that would benefit low- and moderate-income families and stimulate retail sales."
Cassis's bill would save shoppers an estimated $22-27 million across the state. Families shopping for back-to-school clothes would save, on average, at least $25 - and the actual savings would be far greater when combined with special sales and retail promotions, Meyer said.
"There has been a great response to sales tax holidays in New York, Florida and Texas by everyone involved - shoppers, retailers and public officials," Meyer said. "The holiday also has boosted sales of taxable items and resulted in an overall increase in sales, not simply a shift of purchases to the holiday period."
The legislation got off to a running start before getting lost in the last-minute budget deliberations, Meyer added. The legislature should make it a priority to finish work on the tax holiday and put it in place for Labor Day 2001, he said.
The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers. Its more than 5,500 retail business members operate more than 12,000 stores across the state.