Gov. Ed Rendell wants to hold a "green holiday" to give consumers two weeks to buy energy-efficient products free of the state sales tax.
Consumers who buy designated appliances would avoid the 6 percent sales tax -- 7 percent in Allegheny County. Rendell said the program would help consumers more easily afford the energy-efficient appliances, which "are not quite cost-competitive yet."
One tax holiday would fall in the first full week of May and the other in the first full week of December. The holiday would mean a $30 savings on a $500 appliance, or $35 in Allegheny County.
Only a select list of products that carry the federal Environmental Protection Agency's "Energy Star" designation -- including washers, dryers, refrigerators, air conditioners and compact fluorescent bulbs -- would qualify for the tax break.
The agency created the voluntary Energy Star label in 1992 as a way to encourage the purchase of products that use less energy and water than standard models.
The tax holiday is expected to cost the state $2.6 million in its first year, growing to $5.8 million in the 2007-08 fiscal year. Rendell is asking lawmakers to include the proposal in this year's budget plan.
The program is similar to two weeks of tax holidays for computer purchases given in recent years, until they were dropped due to budget woes. Other states have provided tax holidays for clothing and school supplies.
State Sen. Constance Williams, D-Montgomery, first proposed the holiday in a bill that has been stalled in committee for a year. Williams said consumers might pay more up front for energy-efficient products but would eventually recoup it through savings on utility bills.
The average family spends $1,400 per year on energy bills, Rendell said, but would save $400 if using energy-efficient appliances. Consumers who reap the benefits of such appliances might encourage others to follow suit, he said.
"The hope here is eventually you won't need tax holidays," he said.
