CEA Advocates A Sales Tax Holiday For High-Tech Products

As many states consider legislation to give their residents a sales tax ""holiday"" on purchases of clothing and footwear before the next school year begins, the Consumer Electronics Association (CEA) is urging state legislators to include high-tech products. ""Back-to-school shopping no longer means just clothing and shoes,"" explains Gary Shapiro, CEA's President and CEO. ""In this digital age, families will be shopping for computers, Internet appliances, software and wireless products in preparation for the school year."" At least ten states are considering legislation to lift temporarily the state sales tax on purchases of clothing and footwear. According to CEA, there are more than two dozen bills pending in state houses across the country. ""Tax-free shopping helps drive overall sales - fueling continued economic growth - and many state governments have record budget surpluses,"" said CEA Director of Government Affairs Doug Johnson. ""This is an opportune time for state lawmakers to recognize the economic and educational value of information technology products and help close the 'digital divide' by making these products more affordable."" In New York, the state's 4 percent sales tax on shoes and clothing items will be eliminated permanently on purchases up to $110 beginning March 1, 2000. ""We take New York's action as a positive sign that regressive sales taxes can be replaced by a fairer system,"" said Shapiro. ""However, it is important that such initiatives include technology products which are so critical to future economic growth."" CEA is recommending that temporary sales tax exemption legislation include computers and related technology products with a sale price less than $1,000. At present, several states are considering bills that would apply only to clothing and shoes under $100. If the state sales tax were 5 percent, the consumer would save no more than $5. ""A sales tax holiday that applies to technology products means a family purchasing a $700 computer could save enough to buy children's software, for example,"" said Johnson. A January 2000 survey conducted by CEA shows that 46 percent of US households do not have a personal computer.