Week In Review

State Capitol Week in Review

            LITTLE ROCK – Arkansas will hold its annual sales tax holiday on Saturday, August 2, and Sunday, August 3.

The legislature created the sales tax holiday by approving Act 757 of 2011.  The intent of the act is to help families with children in school, and is commonly known as the “Back to School” sales tax holiday.  However, everyone benefits from the holiday, whether or not they have children of school age.

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

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.  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.

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

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.  So will 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.

Medicaid Fraud

            The newly created office of Medicaid Inspector General recovered $1.56 million in fraudulent charges during its first year of operation.

            The legislature created the office when it passed Act 1499 of 2013.  Its duties are to investigate fraud, waste and abuse in the Medicaid program, which accounts for more than $6 billion a year in state and federal spending in Arkansas.

            Arkansas is one of many states that have expanded their Medicaid fraud divisions in response to the national Affordable Care Act, which has significantly increased government spending on health coverage.

            Medicaid is a government-subsidized health program for poor people, the elderly and people with disabilities.