Iowa Sales Tax Holiday is No Cause for Celebration
A sales tax holiday is a limited time period during which a state frees purchases of specific items from state and local sales tax. At first glance this seems like a good policy from a tax-skeptical, pro-consumer perspective — giving people a break — especially when times are tough, as they are, now, with high inflation. However, sales tax holidays create complexities for tax code compliance, do not promote economic growth or increase consumer purchases, and distract policy makers from truly beneficial sales tax reforms.