This weekend, people will pour into South Carolina stores to take advantage of a three-day sales tax holiday.
The brief respite will drop the state's 6 percent sales tax and any local sales taxes from the price of a long list of items, with the stated purpose of saving parents money as they get their kids ready for school.
Lawmakers will pat themselves on the back, all the while failing in a fundamental duty -- comprehensive tax reform. That reform should include dropping most of the state's 78 sales tax exemptions.
With the exemptions, for such things as prescription drugs, electric bills, groceries and a $300 cap on automobile sales taxes, only 38 percent of gross sales are subject to the state sales tax, according to the Taxation Realignment Commission, a group lawmakers created to study comprehensive tax reform.
How much better to do away with a broad range of exemptions, with little going for them except lobbying expertise, and lower the overall tax rate all year round than to throw the state's consumers an occasional tax holiday.
In March, with a lawsuit challenging the sales tax exemptions at the state Supreme Court, House lawmakers introduced a bill to cut 44 exemptions and lower the overall state sales tax rate to 5.5 percent. By April, the number of exemptions on their hit list had dropped to 22. (We're still waiting for that Supreme Court ruling.)
The bill also would have reinstated South Carolina's "Second Amendment holiday," a 48-hour reprieve in November from paying sales taxes on the purchase of handguns and shotguns. The bill made it to the Senate, but got no further than the Senate Finance Committee.
It's probably for the best. A weak version of what they should do would only have them patting themselves on the backs again for a job well done.
The verdict is mixed on what sales tax holidays, now offered in 17 states, really do for consumers and retailers. A Tax Foundation study shows no overall impact on retail sales for the year. Consumers shift the timing of purchases as a result of a holiday, but don't spend more in the long run. Many retailers say it provides a big bump in sales at a critical time of the year. It also helps in the sale of items that aren't exempt from sales tax over the tax holiday.
Those consumers who fight the crowds probably save money, but not as much as a lower sales tax rate year round offers.
Lawmakers should read again the final report of the Taxation Realignment Commission. The commission recommended repealing or amending 60 of the sales tax exemptions and expanding transactions subject to a sales tax to reflect the shift from a goods-based economy to a service-based economy. It estimated the sales tax could drop to at least 5 percent and potentially as low as 4 percent.
The change, the 2010 report states, would move South Carolina from one of the sales tax states to one of the lowest and would bring more stability to a very unstable tax source.
Lawmakers should get the state's sales tax house in order, not throw us a couple of short-term holidays.