Analyzing sales tax holidays.

Sales tax holidays are periods of time when selected goods are exempted from state, and sometimes local, sales taxes. Exemptions for targeted products including back-to-school supplies, clothing, computers, hurricane preparedness supplies, and products bearing the U.S. government's Energy Star label. Late summer and early autumn see the greatest concentration of sales tax holidays, anticipating the back-to-school shopping season. New York sparked the trend in 1997 as a way to discourage border shopping. In 2011, 16 states will conduct sales tax holidays, down from a peak of 19 states in 2010.

Sales tax holidays have broad political support, with backers arguing that holidays are a highly visible form of tax cut that provide benefits to low-income consumers. Supporters say sales tax holidays improve sales for retailers, create jobs, and promote economic growth.

However, the...