By Gene Meyer
July 26, 2010

(KansasReporter) TOPEKA, Kan. - More states than last year are holding sales tax holidays in connection with retailers' back-to-school sales, according to a new Tax Foundation report released Monday.

Kansas isn't among them, though two of its neighbors are. Kansas may be getting the better end of the deal, tax specialists say.

Eighteen states, including Missouri and Oklahoma, are holding back-to-school sales tax holidays this year in which state and some local retail sales taxes will waived for specific clothing and other items, reports the Tax Foundation. That's up from 16 in 2009, when budget balancing pressure stifled tax holiday sentiment in many state capitals and up from 17 in 2008, the nonpartisan fiscal watchdog group reported.

That is not a good thing, suggests Mark Robyn, a Tax Foundation staff economist and co-author of the report. While the idea may be enticing, such holidays in real life aren't shown to promote economic growth and come with too many restrictions to provide meaningful tax relief for middle and lower income shoppers, the report concludes.

"Sales tax holidays are gimmicks designed to win political points for lawmakers," Robyn said. "If lawmakers want to cut taxes, they should do so in a way that benefits everyone, no matter what they purchase or when they purchase it."

In the sales tax holidays closest to Kansas, Missouri will be exempting its 4.225 percent state sales tax on some clothing purchases up to $100, some school supplies up to $50, and some personal computer gear up to $3,500. Local and county governments also can participate, wiping out up to another approximately 5 percent taxes in communities that participate. Oklahoma is exempting its 4.5 percent state sales tax and as much as 7 percent more in local and county sales tax. Both holidays are scheduled the weekend beginning Aug. 6.

Kansans, depending on where they shop will be paying a statewide 6.3 percent sale tax plus local and county taxes that add as much as 4 percent more. But how that translates into a presumably Kansas-feared or Missouri-hoped-for sales migration, for example, isn't clear.

Big Kansas City area retailers with operations on both sides of the Kansas-Missouri border declined to talk Monday of how past holidays have altered sales patterns those weekends. Both retailing giant Walmart and electronics powerhouse Best Buy and Sears said they did not break out sales figures in that much detail; JC Penney did not return phone calls.

Higher up in the analytical crows nests, "there are a lot of conflicting studies out there," said Kent Eckles, a lobbyist with the Kansas Chamber of Commerce, which neither advocates nor opposes a similar tax holiday in the Sunflower State.

One of the few points those conflicting studies appear to agree on is that if tax holidays are an issue, it probably means that overall sales tax rates are too high, Eckles said.

And any lasting damage to Kansas retailers' bottom lines seems highly unlikely, said John Mikesell, an economist and tax policy specialist at Indiana University in Bloomington.

"If a few people go across the border for a few days to save four or five percent, the loss is going to be pretty trivial," Mikesell said. "And it won't be any bargain for Missouri, either."

Retailers in general already were holding back-to-school sales anyway before the idea of sales tax holidays began spreading nearly two decades ago, he said.

Even if holiday-side retailers don't raise prices in anticipation of increased traffic, suspending sales tax collections for a few days will increase compliance and collection costs, potentially complicate enforcement and "add a whole lot of extra costs to the system for no economic gain," Mikesell said.

"Now, they're getting state legislators to take the hit instead of the stores," he said.