The governor has proposed enacting a sales tax holiday Aug. 12 and 13 of this year. The move would enable Rhode Island retailers to compete with a similar holiday in Massachusetts, according to the governor, while saving Rhode Island taxpayers about $5.3 million.

During the Governor’s proposed two-day sales tax holiday, the state would collect no sales tax on most goods costing $2,500 or less.

The state would continue to collect sales and use taxes on a limited set of goods and services, including automobiles, telecommunications services, cigarettes, restaurant meals, hotel accommodations, and all business-to-business transactions.

In 2004, the following 11 states enacted sales tax holidays: Connecticut, Florida, Georgia, Iowa, Massachusetts, Missouri, New York, North Carolina, South Carolina, Texas, and New Mexico. Washington, D.C., also had a tax holiday.

During the 2005 and 2006 period, 14 states and two major cities have held or are scheduled to hold sales tax holidays. They are Louisiana, Connecticut, Georgia, North Carolina, South Carolina, Massachusetts, Missouri, Iowa, Texas, Florida, New Mexico, New York, Maryland, and Tennessee, as well as New York City and Washington, D.C.