(The Center Square) – A pair of Wisconsin Democrats are proposing the state start a new back-to-school sales tax holiday.
The holiday would apply on closing items priced no more than $150 and school supplies priced at no more than $100. The sales tax holiday would be the Friday through Sunday of the first weekend in August.
The proposal was introduced by Sen. Brad Pfaff, D-Onalaska, and Rep. Jenna Jacobson, D-Oregon.
“I have two grown children,” Pfaff said. “I know just how expensive it can be to get the family ready to return to the school year. A back-to-school tax-free holiday is just one way that we can help parents keep more of their hard-earned cash in their own pockets.”
The bill would require the Department of Revenue to give annual estimates on the total sales taxes that would have been paid to cities and municipalities and then would require the state to reimburse those local governments to hold them harmless.
There are 19 states that will have some form of sales tax holiday in 2025, according to the Tax Foundation.
The group cited studies showing that tax holidays do not increase purchase and instead lead people to transfer spending from other times to the tax-free weekend.
“Sales tax holidays are politically popular with elected officials because they offer direct discounts, whether real or perceived, to consumers in a highly visible way,” the Tax Foundation wrote. “Consumers often believe they’re getting a good deal. Thus, they remain popular despite their economic inefficiencies, unintended consequences, and frequent inability to achieve their stated goals.”
