Benefit Or Budget Buster Debate Over Maryland's Sales Tax Holiday

By Cathy Carter

Maryland's sales tax holiday kicked off this week, and opinions are split over whether the policy makes good fiscal sense.

Steve Checkon is shopping at the Montgomery Mall in Bethesda, and he has a list.

"Shoes, socks, underwear, t-shirts, undershirts," reads Checkon.

When the register rings, Checkon will pay a little less than usual. His items are exempt this week from Maryland's six percent sales tax.

Patrick Donoho, President of the Maryland Retailers Association says the state's back to school stimulus is good for consumers.

"The working families have been terribly hit by the recession, and this provides them an opportunity for some small tax relief," says Donoho.

Shoppers may enjoy the brief break from the tax collector, but economists like Neil Bergman of the Maryland Tax Policy Institute says the waiver comes at too high a price.

"But it's going to cost our state government $9 million at a time when we're cutting budgets and looking for new revenue sources," says Bergman.

Many lawmakers agree, the District repealed it's tax holiday program last year to avoid the loss of an estimated $640,000 in sales tax revenue.