Annual Sales Tax Holiday

Arkansas will hold its annual sales tax holiday on Saturday, August 1, and Sunday, August 2.

Clothing and footwear that cost less than $100 per item will qualify for the exemption. However, if you buy an item that costs more than $100 you must pay the state and local sales taxes on the entire amount.

Accessories costing less than $50 qualify for the exemption. Examples include wallets, watches, jewelry, sunglasses, handbags, cosmetics, briefcases, hair notions, wigs and hair pieces.

Here’s an example provided by the Department of Finance and Administration: a person buys two shirts for $50 each, a pair of jeans for $75 and a pair of shoes for $125. The sales tax will only be collected on the shoes, because they cost more than $100.

Even though the total price of the shirts and the jeans added up to $175, no sales tax will be collected on them because each individual item cost less than $100.

School supplies also qualify, including binders, book bags, calculators, tape, paper, pencils, scissors, notebooks, folders and glue.

Textbooks, reference books, maps, globes and workbooks will be exempt from sales taxes. Also exempt from the sales tax will be art supplies needed for art class, such as clay and glazes, paint, brushes and drawing pads.

Bathing suits and beach wear will be exempt as long as they cost less than $100 per item. Diapers and disposable diapers will not be taxed. Boots, including steel-toed boots, slippers, sneakers and sandals will be exempt from the sales tax as well.

Not exempt from the sales tax are sporting goods, such as cleats and spikes worn by baseball, soccer and football players. Recreational items such as skates, shoulder pads, shin guards and ski boots will be taxed.

Computers, software and computer equipment are not exempt and you will have to pay sales taxes if you purchase those items on the holiday.

Act 757 provides that the sales tax holiday will be the first weekend of August every year. All retail stores are required to participate and may not legally collect any state or local sales taxes on qualified items during the tax holiday.

The legislature created the sales tax holiday by approving Act 757 of 2011. One of the goals of the act is to help families with children in school, which is why it is commonly known as the “Back to School” sales tax holiday.

However, everyone benefits from the holiday, whether or not they have children in school.

Correction

Last week I wrote that the number of children in foster care in Arkansas had gone down 12 percent since 2018, when in fact it went down 12 percent since 2017. The number of children in foster care went down from 4,817 in 2017 to 4,226 from in 2019.

Case workers try to help the family remain intact. If that is not possible, under state law the case workers give preference to relatives rather than people who are not related to the children. According to the independent assessment, Arkansas “made considerable improvements with both placing children in care close to the homes from which they were removed and placing children with relatives.