ShoppersÆ Perceptions of the State SalesTax Holiday:A Case Study from Texas

Texas, like more than a dozen other states, offers an annual sales tax holiday. At the state legislative level, the Texas sales tax holiday is intended to provide tax relief to working families timed to coincide with back-to-school purchases and to give a boost to brick-and-mortar retailers. Focusing on the consumer, this paper presents the results of a 2004 mall-intercept survey of 710 shoppers concerning the Texas State tax holiday and finds: 1) the holiday is not only incredibly popular, but also very important to the decision to shop; 2) the tax holiday is most important to consumers with household incomes between $10,000 and $40,000 and purchase intentions between $100 and $750; and 3) the customers most motivated by the sales tax holiday to shop assign less importance to product price and more importance to mall location in their shopping decision.