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Tax break for Tennessee shoppers

Calling all Volunteers. Shopping volunteers in Tennessee and neighboring states, that is.

Salestaxholidaylogosmall Starting today and continuing through 11:59 p.m. Sunday, April 29, Tennessee is offering shoppers a spring sales tax holiday. This weekend's April event is a one-time only deal, state officials say. Tennessee's regular fall sales tax holiday will roll around Aug. 3-5.

That means in both late summer and this weekend, Tennessee shoppers won't have to pay the state's 7 percent sales tax on items such as qualified clothing, school supplies priced $100 or less or on computers priced $1,500 or less.

This Web page lists the qualified sales tax-free items. You can see the info in a nine-page alphabetical format here.

And if you find yourself frequently asking questions about Tennessee's sales tax holidays, find the answers here, along with e-mail address and a special phone number to call in case your inquiry isn't addressed in the FAQs.

Continuing in Connecticut: Since last summer, Connecticut has been offering consumers a sales tax break on energy-efficient weatherization products.

That benefit continues through June 30.

Tax-exempt items include:

  • Programmable thermostats;
  • Window film;
  • Caulking;
  • Window and door weather strips;
  • Insulation;
  • Water heater blankets;
  • Water heaters;
  • Es_logo_12_2 Boilers that meet the federal Energy Star standard. (Energy Star qualified boilers have an annual fuel utilization efficiency (AFUE) rating of 85% or greater.);
  • Natural gas furnaces that meet the federal Energy Star standard;
  • Propane furnaces that meet the federal Energy Star standard;
  • Windows that meet the federal Energy Star standard;
  • Doors that meet the federal Energy Star standard;
  • Oil furnaces that are not less than 85% efficient based on the AFUE rating; and
  • Ground-based heat pumps that meet the minimum federal energy efficiency rating.

You can find complete details on the Nutmeg State's energy-efficient sales tax break here.

And if you didn't claim it on your 2006 federal return, don't forget to also take any energy-related home improvement tax credits offered by the IRS in 2007. The federal-state combo could provide you some nice savings as you spruce up your house this spring.

Not the best tax idea: Most tax-policy experts don't think very much of tax holidays.

"The purpose of sound tax policy is to raise necessary revenue for programs while minimizing distortions in the economy, and interfering as little as possible with the choices of free individuals in the marketplace," write economists at the Tax Foundation. "Unfortunately, sales tax holidays fail this test of sound policy."

You can read the Tax Foundation's full argument against sales tax holidays here. The table of 2006 tax holidays in that paper will give you an idea of what tax holidays to expect in 2007, since most are set by the state legislatures for roughly the same time of year each year, just in case you need to get the dates on your calendar.

But bad tax policy aside, shoppers love the idea of getting a deal, especially at the expense of the tax collector. And politicians love anything that makes potential voters happy.

So tax holidays are here to stay.


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