Press Release
From the Office of State Senator Rodney Ellis

For Immediate Release
February 22, 2005
Contact: Jeremy Warren, (512) 463-0113

Senator Rodney Ellis Seeks to Expand, Extend Sales Tax Holiday

Legislation would expand holiday to two weeks, cover school supplies

(Austin)// -- Senator Rodney Ellis (D-Houston) has filed legislation SB 383 and SB 384, to expand and extend the Texas sales tax holiday.

SB 383 will extend the holiday to 14 days, and SB 384 will expand the holiday to cover school supplies. Both initiatives were part of the original bill filed by Ellis in 1999. According to the Comptroller of Public Accounts, SB 383 and SB 384 combined will save Texas consumers over $589 million by 2010.

"Texas families are struggling," said Senator Ellis. "Prices are going up across the board and more and more families are getting squeezed. This legislation will provide Texas families with a little break when they need it most."

At 8.25 percent, Texas has one of the highest combined sales tax rates in the United States. When combined with local sales taxes, some Texan must pay over 10 percent in sales tax. High sales taxes hit low income and elderly Texans the hardest, forcing our poorest citizens to pay as much as six times more of their income in sales taxes than more affluent Texans.

"I wanted to include school supplies and have a two-week holiday back when we created the sales tax holiday in 1999," said Ellis. "It just makes sense if we want to help families prepare and save for school to give them more savings options and a little more time to make their decision."

"Because of the popularity of the existing sales tax holiday and relief that it grants Texans, the Texas Retailers Association favors the expansion of the sales tax holiday to include school supplies and the extension of the holiday to two weeks," Chuck Courtney, President of the Texas Retailers Association said. "We are very supportive of Senator Ellis's legislation."

The sales tax holiday was created in 1999 by legislation passed by Senator Ellis. SB 441, which has provided $1.7 billion in tax relief to Texas consumers and businesses, established the three-day sales tax holiday, eliminated sales tax on over-the-counter medicines, and provided franchise tax relief for small businesses.

"The sales tax holiday has meant real tax relief to Texas families," said Ellis. "Too often, when the legislature starts cutting taxes, the little guy gets left out. For instance, property tax cuts will not help the majority of the people in my district because 55 percent rent rather than own a home. Expanding sales tax relief will mean that the folks that need relief the most will get a tax cut this session."