Friday, July 15, 2011

Week In Review

State Capitol Week in Review



LITTLE ROCK – Arkansas shoppers can enjoy the state's first sales tax holiday the weekend of August 6 and 7, when retail stores will not charge sales taxes on purchases of school supplies and articles of clothing costing less than $100.


Accessories under $50 also will be exempt from the sales tax. Shoes, boots and sandals will also be exempt if they cost less than $100.


The sales tax holiday is a result of Act 757, enacted earlier this year by the legislature. Although it was labeled a "back to school" tax holiday, it will benefit all consumers who buy clothes and accessories. No sales taxes at all will be collected, neither state nor local sales taxes. That means shoppers will pay what the sticker price indicates for clothing, accessories and school supplies.


Clothing that will be exempt from the sales tax includes footware, diapers, wedding apparel, gloves, aprons, hats, neckties and even rubber pants. Exempt accessories include jewelry, cosmetics, briefcases, watches, wigs, hair notions, umbrellas and non-prescription sunglasses.


Exempt school supplies include binders, paper, notebooks, markers, pencils, rulers and protractors. It is a long list of items that common sense dictates are needed for school. It also includes art supplies such as paintbrushes, paint, clay and drawing pads. Maps, globes and reference books are included in the items that will be exempt from sales taxes.


There is no limit on the number of items a consumer can buy and still benefit from the exemption.


For example, you can buy half a dozen shirts for $20 each and not pay sales tax on any of them even though the total is more than $100. However, if you buy a dress for $120 you will have to pay sales taxes on the entire amount of the purchase.


Calculators are considered school supplies and will be exempt, but computers and software are not. Sales tax will be collected on computers and periphery equipment.


There will be a "back to school" sales tax holiday every year in Arkansas. Act 757 says that it will be on the first weekend of August, which this year falls on Saturday, August 6, and Sunday, August 7.


Act 757 was one of a package of tax cuts measures enacted by the legislature in the 2011 regular session. Act 755 reduces the state sales tax on groceries by half a cent. Act 754 lowers the sales tax on utility bills of manufacturing plants.


Act 753 makes more used car purchases exempt from the sales tax by raising the exemption level. Previously, used car purchases were exempt from the sales tax if the car cost less than $2,500 and now they are exempt if the used car is sold for less than $4,000.


Lottery Scholarships


More than 30,000 Academic Challenge Scholarships have been awarded by the state Higher Education Department to students who will attend a four-year university or a two-year college in Arkansas this fall. Money for the scholarships comes from the state lottery.


More than 12,000 scholarships went to graduating high school students who will attend college for the first time this fall. More than 18,000 went to college students who received the scholarships and had them renewed because they maintained a 2.5 grade point average and completed 27 hours.

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