OKLAHOMA CITY (AP) - Oklahoma retailers were re-stocking their shelves Thursday as they prepared for the state’s annual sales tax holiday on back-to-school clothing and shoes, a shopping frenzy that coincides with the beginning of another school year.
Shoes and clothing costing less than $100 are exempt from state, city, county and local sales taxes during the three-day period that begins one minute after midnight Friday and ends at midnight Sunday as thousands of school-age children prepare to return to classrooms across the state.
The Oklahoma Tax Commission says shoppers will save more than $7.3 million in sales taxes during the long weekend, which retailers say is one of their busiest shopping events of the year.
“We would put it in perspective as our third biggest event of the year,” said Debbie Griesinger of the Outlet Shoppes of Oklahoma City. Only Black Friday, the day following Thanksgiving Day, and the day after Christmas Day attract more shoppers, Griesinger said.
Consumers are drawn to retail stores by the temporary lifting of sales taxes as well as the seasonal introduction of new fall clothing and summer clearance sales, Griesinger said.
“It all collides,” she said.
Sales tax holidays are conducted at various times during the year in Oklahoma and 16 other states, including Texas, Arkansas and Missouri. Craig Shearman of the National Retail Federation, a Washington, D-C.-based advocacy group that represents 18,000 retailers nationwide, said Americans like sales tax holidays because of their disdain for paying taxes.
“There’s a psychological impact that goes far beyond the savings,” Shearman said.
Oklahoma charges a sales tax rate of 4.5 percent of each dollar of taxable sales. Counties and cities assess various sales tax rates that are added to the state rate. In Oklahoma City, the sales tax rate is 3.875 percent, making the total rate 8.375 percent. At that rate, the purchase of $200 of tax-free items would result in a savings of $16.75.
Shearman said families spend an average of $630 during a sale tax holiday event and will likely save $30 or more by not having to pay sales taxes, enough to pay for another school outfit.
“The real importance of this is does it help consumers,” Shearman said. “There are a lot of hardworking American families out there still struggling to put clothes on their children’s back.”
But tax policy analysts criticize temporary sales tax holidays as little more than a gimmick that do nothing to reduce taxes for low- and moderate-income taxpayers during the rest of the year.
“The bottom line is that whatever policy goal you want to achieve through a sales tax holiday, there are probably better ways to achieve those goals,” said Matthew Gardner, executive director at the Institute on Taxation and Economic Policy.
Gardner said sales tax holidays provide no long-term tax relief to consumers. The institute believes greater tax fairness would be achieved with a permanent refundable low-income sales tax credit or Earned Income Tax Credit to offset the impact of the sales tax on low- and moderate-income taxpayers.
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