For 48 hours this weekend, shoppers in Arkansas will get a break from the "tax man" on certain items. The third annual Sales-Tax Holiday begins Saturday at 12:01 a.m.
Largely intended to help back-to-school shoppers, state and local taxes are eliminated for clothing and accessories, shoes, school supplies and books as mandated by Act 757 of 2011. There are a few catches, though. Clothes and shoes have to be under $100, for example. Accessories must be under $50 each to qualify. But even items such as diapers and wedding apparel are included.
Online sales are also part of the tax holiday.
"Anything on the list that is sold in or shipped to Arkansas, the sellers will have to honor the tax holiday," said Roberta Overman, Arkansas Department of Finance and Administration manager of sales tax office. "For example, if you went to Office Depot online, they would not charge you for state taxes."
Voters approved a half-cent state sales and use tax increase in November for highway improvements. It went into effect July 1, from 6 to 6.5 percent, making the full sales tax for Fort Smith shoppers 9.75 percent. It is a quarter of a percent lower in Crawford County. Fort Smith Deputy City Administrator Jeff Dingman confirmed that those taxes will not be collected over the tax holiday.
Parents, Stores Prepare
For Rachel Myers-Hill of Fort Smith, the tax break may save her about $100. She will buy clothes for three children ages 4, 5 and 9.
"It helps," Myers-Hill said. "Two of my children hit major growth spurts this year. We need jeans, shoes and shirts."
She and her husband have budgeted between $750 and $1,000 for school clothes and supplies this year, which is nearly twice as much as last year.
"We will make sure to have plenty of denim on hand," said Steve Rugger, store manager of J.C. Penney at Central Mall. "We expect a lot of traffic. I’m glad the state has the fortitude to do it. It helps us, being on the border, because Oklahoma has the tax break."
The tax holiday in Oklahoma is from 12:01 a.m. Friday through 11:59 p.m. Sunday, Aug. 4.
Jennifer Cabalar of Fort Smith, who will take advantage of the tax holiday for the first time this year, said she has not noticed any advertisements for the event and only recently discovered it on a J.C. Penney Facebook page. She plans to spend more than $500 on clothes for her two 13-year-olds, and up to $200 on school supplies.
"We try to donate stuff too, and we look for clearance sales, on the end of the isles, at the very end. They call them end caps," Cabalar said.
Rugger noted his store plans to have coupons distributed Friday, and clearance sales will be offered on summer clothes.
According to a recent survey from the National Retail Federation, the average expenditure for apparel, shoes, electronics and supplies will fall to $634.78 from last year’s record $688.62, which was partly driven up by pent-up post-recession demand. Parents will spend about $26.7 billion nationwide during the back-to-school shopping season.
Roughly 8 in 10 shoppers say they’ll adjust spending plans to deal with the economy, whether they are buying for primary, secondary or higher levels of education.
Melissa Sue Clark, an elementary education student at UAFS, and mother of two, expects to spend nearly $1,000 over the weekend: $200 on clothes and supplies for her children, and the rest on college books.
"What I usually do is get a babysitter, get to Walmart around 11, and try to have all my items ready to check out at midnight," Clark said. "When you go during the day, it’s easy to get distracted. There are more people out, and the heat gets to you."
Central Mall in Fort Smith will surely be busy on the tax holiday. Teresa Richards, marketing and special leasing manager, said some stores at the mall will offer vouchers for a $50 gift card to the first 20 customers who spend $100 at certain hours.
Parents shopping for school-age children have already gotten an early start. The National Retail Federation study also found that about 24 percent of families say they have been pricing items for two months now. Nearly 30 percent of college shoppers are already looking for deals. And more than a third of parents say they plan to do more comparative shopping online. Nearly 4 in 10 college shoppers say they’ll go to the Internet for their retail needs.
Because Arkansas retailers are not required to report their individual sales, it was not possible for the DFA to give an accurate number of how much tax revenue the state loses during the tax holiday. In 2011 when the DFA provided numbers to the Legislature for a tax holiday vote, the loss was estimated to be just over $2 million, Overman said.
According to the DFA’s August 2012 revenue summary, the sales and use tax collections for August 2012 was $178 million, $2.8 million less than August 2011. Collections were below monthly forecast levels by $9.3 million, or 5 percent, the summary adds. Arkansas’ net general revenue for fiscal year 2012, which ends in September, was $5.43 billion.
College Bookstores To Open
Campus bookstores at both the University of Arkansas at Fort Smith and Arkansas Tech University-Ozark will be open for the tax holiday weekend.
"The cost of textbooks and supplies can pile up quickly, so the tax-free weekend is great in that it lets our students save some much-needed funds for life outside of school," said Mitzi Reano, Arkansas Tech bookstore manager.
Items cannot be charged toward a student’s financial aid, Reano added.
Arkansas Tech’s bookstore will be open 9 a.m. to 1 p.m. Saturday, and 1-4 p.m. Sunday.
The Lions Bookstore at UAFS is in the Smith-Pendergraft Campus Center. It will be open 7 a.m. to 7 p.m. on Saturday, and 11 a.m. to 5 p.m. Sunday, Aug. 4. In addition, all web orders placed between 12:01 a.m. Saturday and 11:59 p.m. Sunday, Aug. 4, will be free of sales tax charges, a UAFS news release states.
"If a student decides to rent a textbook or buy one of the available digital books, there is a savings of up to 50 percent off the new book price, and then, when you factor in the no sales tax, this really adds up to some huge savings for students and parents. We have new, used, rental and digital textbooks available," said Amy Baker, Lions Bookstore manager.
The bookstore at UAFS is part of Barnes & Noble College Booksellers.
A full list of what qualifies can be found at the Arkansas DFA website, www.dfa.arkansas.gov. At the site, go to Sales and Use Tax on the left, and then click on 2013 Sales Tax Holiday.