State chamber educates buyers, sellers about tax holiday
Sunday, August 1, 2004
Annette Hunt's phone just won't stop ringing.
In the weeks leading up to the Aug. 13 to 15 statewide sales tax holiday, Hunt -- member services coordinator for the Cape Girardeau Chamber of Commerce -- has been inundated with calls, not only from consumers, but from local merchants who have questions about the holiday.
The same is true at the Missouri Chamber of Commerce in Jefferson City, where director of fiscal affairs Ray McCarty and his staff are fielding questions from businesses in cities and counties all over the state that have also opted to drop their sales taxes for the three-day event.
He's sent chamber representatives and conducted conference calls in hopes of quelling the confusion among the state's stores and retailers.
"We're visiting with anyone who'll have us," McCarty said. His mission is to simply educate everyone he can reach, and minimize the madness at businesses throughout the state for what he believes will be a hectic shopping weekend comparable to the day after Thanksgiving.
Here are some of the frequently asked questions from both chamber offices and answers that may help consumer and merchant alike to deal with and get the most out of the sales tax holiday:
What areas are affected by the holiday? The Missouri Legislature passed the bill dropping the state's 4.225 percent sales tax on specific items sold anywhere in the state from Aug. 13 to 15. In addition, the bill provided that counties and municipalities would drop their sales taxes on the same items during that period.
However, a provision in the bill allowed entities to opt out. Those in the region that have decided not to participate are the cities of Caruthersville, Charleston, Dexter, Doniphan, Farmington, Kennett, New Madrid, Park Hills, Poplar Bluff, Ste. Genevieve and St. Mary. Also opting out were Mississippi, New Madrid, Ste. Genevieve and Stoddard counties. All other regional cities and counties are dropping their sales taxes, including Cape Girardeau, Jackson, Perryville and Scott City along with Perry, Cape Girardeau and Scott counties. What items are exempt from sales taxes during the holiday? Even though the holiday coincides with the back-to-school sales push, items aren't limited to those bought for students. Consumers buying clothing, computers, school supplies and computer software will not be asked for proof that their purchase is for a student.
That means any clothing item priced less than $100 per item can be bought free of tax. Clothing is defined as any article of apparel, including footwear. It does not include watches, jewelry, handbags, handkerchiefs, umbrellas, scarves, ties, headbands or belt buckles. Clothing also includes that sold at thrift stores and consignment shops.
The school supplies eligible for the holiday must total less than $50 per purchase and again, do not have to be bought for a student. Eligible supplies include textbooks, notebooks, paper, pens, pencils, handheld calculators -- basically anything that a student might use in a standard classroom for educational purposes. It does not include sporting equipment, watches, radios or office furniture.
The purchase limit of $50 is like that of a coupon, meaning that you can send your children or go through the checkout as many times at as many stores as you like, but each trip can only total $50 worth of those supplies.
Other items included in the holiday are personal computers priced at $2,000 or less, including hardware and accessories like modems, microphones, printers, scanners and computer software having a taxable value of $200 or less.
Can individual stores in participating areas opt out? No. Any store, be it a second-hand store, a grocery store or a convenience store selling these items in the cities or counties mentioned must waive the sales tax. In fact, even those communities in places that have opted out of county or city involvement must still waive the state sales tax on the specified items.
"The tax being waived is not based on who purchases the item or who sells it," McCarty said. "It's based on the sale itself."
Other tips for merchants: The Missouri Chamber of Commerce reported that other states that have held similar holidays saw double-digit increases in sales during that time. Based on that information, McCarty has two pieces of advice for retailers in Missouri: Stock up and staff thoroughly.
The logistics manager for Cape Girardeau's Target store doesn't have to take the chamber's word for it. Through his own research, Greg Gallaher found Target locations in Iowa that participated in sales tax holidays saw sales volume jump up to 20 percent. As a result, Gallaher has scheduled every Target employee available to be working during that weekend.
Smaller businesses are also on the alert.
Cathy Davis of Reruns consignment store in Cape Girardeau said she doesn't know exactly what to expect during the three-day tax holiday. But just in case, she's going to have her store prepped with as much merchandise as possible. She said she knows of other small businesses in Cape Girardeau that will extend their hours and even stay open on Sunday when they would otherwise be closed. Davis said it's best to be prepared.
"People can be fickle," she said. "Maybe they will come out, maybe they won't."
335-6611, extension 137