Sales Tax Holiday Set for Aug. 3-4 - Monday, July 29, 2013
Originally published in the El Dorado News-Times on July 29, 2013.
The state will lose about $2 million on the coming sales tax holiday for
back-to-school purchases but that money give consumers a bit more to
spend on clothes and other items ahead of the start of classes.
are preparing for a busy first weekend in August, when apparel, school
supplies and certain other items will be exempt from state and local
sales taxes. The sales tax holiday starts at 12:01 a.m., Aug. 3, and
ends at 11:59 p.m. on Aug. 4.
The National Federation of Independent Businesses said the sales tax break gives small businesses a needed boost.
covered under the exemption include a wide range of clothing items,
from aprons and athletic supporters to wedding dresses. But the catch is
that each item has to cost less than $100. And the rules stipulate that
items can’t be divided to fall under the limit. So consumers can’t buy
one shoe at a time or separate the components of a suit of clothes that
are otherwise sold as a set.
Clothing accessories or equipment
are exempt if they cost less than $50. The category includes cosmetics,
"hair notions,” nonprescription sunglasses, umbrellas, watches, wallets,
wigs and other items.
School supplies are also exempt, including binders, book bags and lunch boxes.
Some art supplies and school instruction manuals are also tax-free.
Department of Finance and Administration said the exact amount the
holiday will keep from entering state coffers isn’t known. But when the
Legislature approved the law in 2011, the agency estimated that it would
cost about $2 million per year for a two-day sales tax break, John H.
Theis, assistant commissioner of revenue, said in an email.
estimate was based on information from other states with a sales tax
holiday where merchants are required to separately report those sales to
the state. Current Arkansas law does not require merchants to
separately report their sales activity for the sales tax holiday
weekend,” he said.
Theis said there were no major problems
during past sales tax holidays. He said DF&A looked at problems
other states had when they launched similar programs and were able to
head off any significant difficulties.
The Arkansas director of
the NFIB, Sylvester Smith, said the economy is still slow and the
weekend will help sales at smaller businesses.
holiday puts people in the mood to shop, and we’re hoping they buy at
least some of their school clothes and supplies at small, locally-owned
businesses, because when you support small business, you’re supporting
your community,” Smith said in a statement.