Review the following scenario and then analyze the impact of tax holidays on the budget.

Review the following scenario and then analyze the impact of tax holidays on the budget.

Scenario: Several states have declared sales tax holidays for which the state does not collect sales tax on selected items for those day or days. In most instances, the holiday has applied to purchases of clothing and the period has been a week to 10 days in August. The primary reason is to provide a “back-to-school” discount as families get ready for the upcoming year; however, in recent years, some states have proposed or enacted holidays for hurricane survival supplies, gasoline, Energy Star appliances, and guns and ammunition.