The annual sales tax holiday for back-to-school shoppers begins Friday in Oklahoma and Saturday in Arkansas to help back-to-school shoppers save a few bucks.
The cut in state and local sales taxes are for many items both at stores and online. Act 757 of 2011 mandated the Arkansas sales tax holiday. The Oklahoma Legislature passed Senate Bill 861 in 2007.
Saving about 10 percent on state and local taxes may not be worth fighting the crowds for some shoppers, but for others it is a welcome reprieve that adds up.
Whether local shoppers are using their phone or going directly to the store in person, the tax exemptions are similar in Arkansas and Oklahoma, with sales taxes remaining on clothes and shoes that cost more than $100. Oklahoma does not exempt taxes on school supplies or clothing accessories.
In Arkansas, the state and local sales tax will not be collected on clothing and footwear with a sales price of less than $100 per item, clothing accessories and equipment less than $50 per item, school supplies, school art supplies, and school instructional materials.
Some unexpected eligible items for exemption during the tax holiday in Arkansas include diapers for children, girdles, wedding apparel, umbrellas, sunglasses, lip gloss and hair wax. A full list of eligible items is available at the Arkansas Department of Finance and Administration website under the “Sales & Use Tax” section.
The items that are exempt from the Oklahoma Tax Free Weekend can be found online at www.freetaxweekend.com/oklahoma-sales-tax-holiday.
As in previous years, Central Mall in Fort Smith will have extended hours during tax-free weekend. Stores will be open Saturday from 9 a.m. to 10 p.m. and Sunday from 11 a.m. to 7 p.m.
The tax-free holidays begin at 12:01 a.m. Friday for Oklahoma and 12:01 a.m. Saturday for Arkansas. Both states end their sales tax holiday at 11:59 p.m. Sunday.
Consumer confidence is up
According to the National Retail Federation, consumer confidence is up and back-to-college spending is expected to hit an all-time high this year.
Nationally, back-to-school spending is expected to see its second-highest spending level on record, according to the group’s annual survey conducted by Prosper Insights and Analytics.
Total spending for school and college combined is projected to reach $83.6 billion, a more than 10 percent increase from last year’s $75.8 billion.
“Families are now in a state of mind where they feel a lot more confident about the economy,” NRF President and CEO Matthew Shay said at the group’s website. “With stronger employment levels and a continued increase in wages, consumers are spending more and we are optimistic that they will continue to do so throughout the rest of the year. As students head back to the classroom, retailers are prepared to meet their needs whether it’s for pencils and paper, shirts and pants or laptops and tablets.”
It’s difficult to say exactly how much the Tax Free Holiday has impacted the city of Fort Smith’s coffers, but it appears to have been minimal.
Although there has been a steady increase in Fort Smith’s sales tax collections over the past five years, the city also began gathering a one-quarter cent city sales tax for “fire and parks” in November 2012, a year after Act 757 of 2011 put the tax holiday into effect. The one-quarter cent tax brings in about $400,000 a month for the city, a regional retail hub.
The 9.75 percent state, county and city sales tax in Fort Smith gathered just in August, the month of the sales tax holiday, has increased by about $400,000 between 2013 and 2016. The sales tax receipts for August in Fort Smith were $2.96 million in 2011; $2.8 million in 2012; $3.3 million in 2013 and 2014; $3.4 million in 2015; and $3.7 million in 2016.
Families with children in elementary through high school plan to spend an average $687 each, for a total of $29.5 billion, an 8 percent increase from last year’s $27.3 billion, the National Federation of Retailers survey noted. Total spending is the second-highest in the history of the survey following a peak of $30.3 billion in 2012.
According to the survey, back-to-school shoppers plan to spend $10.2 billion on clothing (purchased by 95 percent of respondents), $8.8 billion on electronics such as computers or calculators (60 percent), $5.6 billion on shoes (93 percent) and $4.9 billion on school supplies such as notebooks, folders, pencils, backpacks and lunchboxes (97 percent). Parents say they will spend an average of $238.89 on clothing, $204.33 on electronics, $130.38 on shoes and $114.12 on school supplies. While consumers plan to spend more across all categories, shoes and school supplies seeing the highest expected increase.
For the first time, the survey asked consumers what types of electronics they plan to purchase. Among electronics shoppers, 45 percent said they would buy a laptop computer while more than a third plan to purchase a tablet (35 percent) or a calculator (35 percent). One in four plan to purchase electronic accessories such as a mouse, flash drive or charger.
“Schools are changing their classroom experience to include more technology including laptops and tablets,” Prosper Principal Analyst Pam Goodfellow said at the National Retail Federation website. “That is why many parents, specifically Millennials, are spending more during back-to-school season and taking advantage of retailers’ best deals to stretch their budgets.”
According to the survey, 65 percent of back-to-school shoppers say half or more of their purchases are a direct result of their children’s influence, up from 57 percent last year. And while children’s influence is growing, so too is their willingness to help their parents pay the bill: teenagers will contribute $37.64, up from last year’s $32.90, and pre-teens will contribute $27.09, up from last years $20.08.
More families will tackle their back-to-school lists early this year, with 27 percent beginning two months before the beginning of school, up from 22 percent last year. But not all shoppers are early birds: 21 percent will wait until the last week or two before school starts, about the same as last year’s 22 percent. Of those shopping early, 60 percent say they are trying to spread out their budgets, 48 percent don’t want to miss out on sales and 43 percent want to avoid crowds.
When it comes to where parents will buy, they are shopping across a variety of retailers; 57 percent will shop at department stores, 54 percent at discount stores, 46 percent each at clothing stores and online, and 36 percent at office supply stores. For those shopping online, 91 percent plan to take advantage of free shipping and 54 percent will buy online and pick up in-store.