State Capitol Week in Review From Senator Larry Teague
July 22, 2022
LITTLE ROCK – Every year the sales tax holiday is the first weekend in August. This year it will be Saturday, August 6, and Sunday, August 7.
Consumers will not have to pay sales tax on any articles of clothing that cost less than $100. The exempted items include not only ordinary clothing such as pants, shirts, dresses and shoes. Also free from sales tax are bathing suits, baby blankets, underwear, raincoats, uniforms, hats and caps, aprons, neckties, scarves and steel-toes boots.
Diapers, even disposal diapers, are included on the list of exempt items.
Accessories are also on the list of exempted items, as long as they cost less than $50. The list of articles is extensive, and includes handbags and purses, sunglasses, jewelry, hair notions, wallets, watches and wigs.
More than 65 categories of cosmetics are exempt from the sales tax, such as mascara, many types of hair products, fingernail polish and fingernail remover, bath salts, artificial eyelashes, perfume and stretch mark cream.
School supplies will be exempt from the sales tax. Officially the first weekend of August is called the sales tax holiday, but many people refer to it as the “Back to School” sales tax holiday. That’s because the legislature intentionally scheduled it for early August, to benefit families with children going to school.
School supplies include pens, pencils and paper as well as art supplies.
Thanks to Act 944 of 2021, approved by the legislature earlier this year, certain electronic and computer equipment was added to the list of tax exempt items.
Laptops, desktops, tablets, printers, keyboards, calculators, cell phones, e-readers and monitors are exempt from the sales tax. However, video games, stereos and televisions are not included.
Arkansas families will save an estimated $2.6 million on purchases of electronic and computer equipment.
The sales tax exemption applies to single articles, and is not based on the overall cost of everything you buy. For example, you can buy three shirts $25 each and a pair of pants for $50 and you will not be charged the sales tax, even though the total is $125. Because each item is less than $100, the exemption is applied.
However, if you buy a pair of shoes for $120, you will have to pay the sales tax on the full amount of the purchase.
Essentially, there is no limit on the number of exempt items you can purchase, as long as each item costs less than $100 for clothes or $50 for accessories.
There is no price limit on electronics and computer equipment, nor is there one on school supplies.
The exemption applies to all sales taxes, not just state sales taxes. That means exempt items are free of all city, county and local sales taxes.
All retailers have to participate. Articles cannot be separated in order to lower their price under the $100 and $50 thresholds. Men’s suits and pairs of shoes, which normally are sold as one unit, cannot be split into separate purchases.
7-22-22 9:45 AM KAWX.ORG