PRESS RELEASE: NRF Asks Obama for National Sales Tax Holidays to Aid Consumers as Part of Economic Stimulus

NRF Asks Obama for National Sales Tax Holidays to Aid Consumers as Part 
of Economic Stimulus 

WASHINGTON--(BUSINESS WIRE)--December 23, 2008-- 

The National Retail Federation today asked President-elect Barack Obama to incorporate a series of national sales tax holidays into upcoming economic stimulus legislation as an important step toward rebuilding consumer confidence, saying short-term gains from consumer spending and long-term growth from job creation are both needed to achieve economic recovery.

   "We urge you to act quickly on legislation to help stimulate consumer 
spending as one of the first priorities of your new administration," NRF 
said in a letter to Obama. "To be effective, any fiscal stimulus package 
must be enacted with great speed. It must be substantial. And it must be 
sustained. To accomplish this, the plan must include a longer-term 
investment designed to produce sustained economic growth through job 
creation as well as short-term economic stimulus aimed at increasing 
consumer spending." 

   "The situation is critical," NRF said. "In October, consumer confidence 
was at its lowest level in the 41 years that records have been kept. 
This is due, as you know, to a disastrous combination of decreasing home 
values, increasing unemployment, reduced availability of credit, 
failures of major companies, and weakness in the stock market. Moreover, 
it does not appear that these concerns will abate any time soon. With 
consumer spending accounting for 70 percent of GDP, it is difficult to 
foresee an improvement in overall economic growth until the consumers 
regain their footing." 

   "Retailers' considerable experience with sales tax holidays has shown 
that they provide a substantial inducement for people to shop," the 
letter said. "To this end, we suggest a series of three national sales 
tax holidays that would cover a very broad range of goods." 

   The letter was signed by NRF Chairman Myron E. "Mike" Ullman III 
(Chairman and CEO, JCPenney Company), NRF First Vice Chairman Philip L. 
Francis (Chairman and CEO, PetSmart Inc.), NRF Second Vice Chairman 
Stephen I. Sadove (Chairman and CEO, Saks Incorporated) and NRF 
President and CEO Tracy Mullin. 

   NRF proposed that tax holidays be held during March, July and October 
2009, each lasting 10 days including two weekends. Tax-free treatment 
would apply to all tangible goods subject to a state sales tax ranging 
from apparel and home furnishings to restaurant dining and automobiles 
but would exclude tobacco and alcohol. The federal government would 
reimburse the 45 states that have sales taxes for the lost revenue, and 
would provide the five states without a sales tax (Alaska, Delaware, 
Montana, New Hampshire and Oregon) with revenue approximating the sales 
tax reimbursement that would be received by states with similar 
population. 

   State sales tax rates range from 2.9 percent to 7.25 percent and add 
$236 billion a year to the amount U.S. consumers pay for goods and 
services, according to the U.S. Census Bureau. By temporarily lifting 
the sales tax for the three 10-day periods, NRF estimates that consumers 
could save nearly $20 billion. Based on the 112.4 million households in 
the United States, the figure would amount to almost $175 for the 
average family. 

   In addition to saving consumers money, the sales tax holidays would help 
support the 25 million jobs in the U.S. retail industry, or one out of 
every five U.S. workers, and millions of jobs in industries that supply 
retailers with merchandise and services. 

   A number of states hold sales tax holidays each year -- most in the 
summer to help families with the cost of school supplies -- and 
retailers have found the events prove highly popular with consumers. An 
NRF survey conducted when a national sales tax holiday was considered in 
2001 found 82 percent of consumers favored a tax holiday, 83 percent 
would take advantage by making purchases, and 69 percent would make 
purchases they otherwise would not have made. 

   NRF also called for infrastructure investment in roads, rails, ports, 
public schools and renewable energy projects, saying it would have a 
double benefit of creating jobs and repairing systems that are critical 
to commerce. 

   "We believe that significant investment in infrastructure spending will 
provide jobs and increase GDP at a higher rate than most other 
government investments, and will produce longer-term, sustained growth," 
Mullin said. 

   Click here or visit www.nrf.com for letter and stimulus proposal 

   The National Retail Federation is the world's largest retail trade 
association, with membership that comprises all retail formats and 
channels of distribution including department, specialty, discount, 
catalog, Internet, independent stores, chain restaurants, drug stores 
and grocery stores as well as the industry's key trading partners of 
retail goods and services. NRF represents an industry with more than 1.6 
million U.S. retail companies, more than 25 million employees -- about 
one in five American workers -- and 2007 sales of $4.5 trillion. As the 
industry umbrella group, NRF also represents over 100 state, national 
and international retail associations. www.nrf.com 



    CONTACT: National Retail Federation (NRF) 
             Scott Krugman or Kathy Grannis, 
             202-783-7971 
             krugmans@nrf.com or grannisk@nrf.com 





    SOURCE: National Retail Federation (NRF) 
Copyright Business Wire 2008