Gov. Scott Walker announced Wednesday his plan to include a “Back to School” sales tax holiday in Wisconsin’s 2017-19 biennial budget.
Walker announced the proposal while visiting a Kohl’s in Menomonee Falls, saying the new plan will help reduce the costs of returning to school and purchasing school supplies.
“Our top priority has always been putting Wisconsin’s taxpayers first, and we’re always working to be better stewards of our taxpayers’ dollars and reduce taxes,” Walker said in a statement released today.
The proposed sales tax holiday will temporarily exempt or lower state and local taxes on certain items. Walker said the sales tax holiday would start on the first Saturday in August 2017 and last two days. Products such as school supplies, computers with price tags lower than $750 and clothing costing less than $75 each would be included in the sales tax holiday, according to the statement.
State and local governments use sales tax holidays similar to the one Walker proposed in hopes of increasing specific types of consumer activity. According to the statement, sales tax holidays are most typically utilized for school supplies, children’s products and energy efficient appliances.
These temporary reprieves from sales taxes don’t do much to help relieve financial burdens, according to a New York Times article. In the article, Meg Wiehe, state tax policy director at the Institute on Taxation and Economic Policy, claims these holidays are “really mostly just a political gimmick.” Wiehe also said in the article that sales taxes disproportionately affect low-income families, who “really need a reprieve on a daily basis, not just on one weekend.”
The Department of Revenue indicated Walker’s sales tax holiday proposal would have an estimated $11 million fiscal impact annually. In order to determine the effectiveness of the sales tax holiday, Walker’s proposal is scheduled to remain in effect for two years and then automatically recede.