While last weekend kicked off tax free weekend 2010 for most states, there are a few noteworthy call outs as we head into another key tax free weekend – most importantly the addition of Illinois and Massachusetts to the list since our last post on the topic (see “To Be or Not To Be Tax Free” on 7/7). Neither state participated with an event last year.  However with both states landing in the bottom quintile of the Forbes State Debt rankings at #50 and #42 respectively, we are a bit surprised to see them added to the list given the importance of incremental sales tax as a source of revenue.  Clearly a balance is being struck here between local politics, the consumer, and business climate.  Here are a few other notable observations:

  • Illinois has the 2nd greatest budget gap in dollars at $5Bn behind…you guessed it, California at $9.1Bn.
  • Of the top 5 states most exposed to teens in the 15-19 year-old demographic (CA, TX, NY, FL, IL), California is now the only one NOT to offer a tax free holiday.
  • In addition to FL and MD, IL and MA now join the list of new states adding events vs. last year, adding 10 and 2-day tax-free events respectively.

With both the Midwest and Northeast underperforming other regions since the end of June according to our SportsScan trend data, state government clearly sees these events as an opportunity to stimulate both local demand and stimulate consumer purchasing habits alike. The results of these efforts will be a key focus come September sales day when we begin to see just how successful these stimulus efforts ended up.

 

Tax Free Weekend – Enter the Most Exposed - TeenStateExp 7 10

 

Tax Free Weekend – Enter the Most Exposed - TaxHoliday StateDebtRank 8 10

 

Tax Free Weekend – Enter the Most Exposed - TaxHoliday 1 Sched 8 10

Tax Free Weekend – Enter the Most Exposed - TaxHoliday 2 Sched 8 10