Tax holiday this weekend

07/11/08 5:50PM By Ross Sneyd

(Host) Vermonters can take a holiday this weekend, at least if they want to avoid the state sales tax.

In a bid to stimulate the economy, the Legislature and the governor agreed to suspend the sales tax for two days this summer.

So tomorrow and Sunday, most items will be exempt from the six percent tax. But Tax Commissioner Tom Pelham says there are some exceptions.

(Pelham) ``It does not apply to services. There is a sales tax on energy consumption. Obviously that's not going to be covered by the holiday. There's a sales tax on cable services, for example. So services like that are not tax exempt. But the holiday will apply to pretty much most of what people buy and pay sales tax on.''

(Host) There are other exceptions. Cars and trucks are still subject to the six percent purchase and use tax, for example.

Also, the sales tax holiday only applies to items purchased for personal use. So small businesses can't avoid the tax this weekend. And, the exemption is only for sales up to $2,000.

Pelham says state officials believe the benefits of stimulating the economy will outweigh the potential loss of up to two million dollars in tax revenue.

(Pelham) ``On this holiday, I know the governor looked, listened very carefully to both state economists, who talked about the psychological impact in a recessionary or economic downdraft period. And the psychology is as important as the fundamental economics.''

(Host) Part of the tax holiday will continue for the rest of next week. Sales of efficient appliances, which carry an Energy Star rating, won't be taxed if they cost $2,000 or less.

 

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