The National Retail Federation said sales tax holidays would help rebuild consumer confidence and create jobs.
"We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration," the group said in a letter to Obama. "To be effective, any fiscal stimulus package must be enacted with great speed. It must be substantial. And it must be sustained. To accomplish this, the plan must include a longer-term investment designed to produce sustained economic growth through job creation as well as short-term economic stimulus aimed at increasing consumer spending."
The group noted that in October, consumer confidence was at its lowest level in the 41 years that records have been kept because of a combination of decreasing home values increased unemployment and the global credit crunch, among other factors.
"Retailers' considerable experience with sales tax holidays has shown that they provide a substantial inducement for people to shop," the letter said. "To this end, we suggest a series of three national sales tax holidays that would cover a very broad range of goods."
The group proposed that tax holidays be held during March, July and October 2009, each lasting 10 days including two weekends.