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Senate Bill 1356 would create a sales tax holiday weekend for "WaterSense products." Products designated as WaterSense certified products would be exempt from the sales and use tax if the products are sold during a period beginning at 12:01 a.m. on the Saturday preceding the last Monday in May (Memorial Day) and ending at 11:59 p.m. on the last Monday in May.
The second chamber sponsor is Representative Drew Darby.
No amendments or modifications have been made to the bill since we reported on it. We continue to oppose it.
First chamber recommendation:
Some energy-efficient products, Energy Star qualified products under the Energy Star program jointly operated by the United States Environmental Protection Agency (EPA) and the United States Department of Energy, already benefit from a tax-free weekend during Memorial Day weekend (Section 151.333 of the Tax Code).
It should also be pointed out that consumers are not actually guaranteed savings under these tax holiday schemes. There is nothing preventing merchants from raising prices by the amount that would have been reduced at the register through the tax break. Furthermore, prices can rise due to supply and demand issues created when people rush to purchase tax-exempt goods. Either or both of these factors can lead to consumers actually paying more than they would have if the government had avoided tinkering in the marketplace to begin with.