Covid-19 Makes State Sales Tax Holidays More Popular and Complex

Retailers are poised to make more money during sales tax holidays, but the growing popularity of such holidays—especially tethered to the pandemic—is simultaneously creating more compliance headaches.

Sales tax holidays are naturally beneficial for retailers. As Rachelle Bernstein, the National Retail Federation’s vice president and tax counsel, told Bloomberg Tax, “Many customers and retailers alike enjoy the benefits of sales tax holidays. These tax-free events can help drive customers to stores, and result in increased sales because customers may purchase additional items that may not be tax-free eligible.”

But sales tax holidays are also complex and require time and effort ...