Thursday, July 28, 2016

Week In Review

State Capitol Week in Review
            LITTLE ROCK – Arkansas will hold its annual sales tax holiday on Saturday, August 6, and Sunday, August 7.
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.
Lottery Scholarships
            When the state fiscal year ended on June 30, the Lottery Commission reported an increase of about $12.7 million available for scholarships.
            In Fiscal Year 2015 lottery sales generated $72.6 million for scholarships and in Fiscal Year 2016 they generated $85.3 million.
            Total revenue generated by the state lottery was $456 million. Most of that amount is paid as prizes to winners, or is spent on administration. More than 34,000 students received scholarships during the year, according to the Department of Higher Education.
            It was the first time in four years that lottery revenues increased over the previous year. The Senate chairman of the Lottery Oversight Committee said that he hoped the favorable trend continued.

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