Richard K. Harper, Richard R. Hawkins, and Gregory S. Martin are Associate Professors, and Richard Sjolander is Professor in the University of West Florida's Department of Marketing and Economics. Dr. Hawkins can be reached at email@example.com.
Price Effects around a Sales Tax Holiday: An Exploratory Study
Version of Record online: 16 DEC 2003
Public Budgeting & Finance
Volume 23, Issue 4, pages 108–113, December 2003
How to Cite
Harper, R. K., Hawkins, R. R., Martin, G. S. and Sjolander, R. (2003), Price Effects around a Sales Tax Holiday: An Exploratory Study. Public Budgeting & Finance, 23: 108–113. doi: 10.1111/j.0275-1100.2003.02304006.x
- Issue online: 16 DEC 2003
- Version of Record online: 16 DEC 2003
Tax relief from a sales tax holiday depends on lower final prices for the eligible goods. In this article, prices are compared for ten goods across several retail locations before, during, and after the 2001 Florida sales tax holiday period. The comparison is also extended to the same items in a metropolitan statistical area just outside of Florida. The exploratory data indicate that before-tax prices are slightly higher in Florida retail establishments during the sales tax holiday, but it is not clear whether these prices reflect less generous markdowns by Florida managers or pricing decisions for much larger regions. Whichever the case, the tax policy forces consumers to speculate on non-holiday prices and choose items where the final price is, in fact, lower during the holiday.