Dillard's Pushes for Sales-Tax Holiday

Little Rock, Ark. Dillard's Inc. and small retailers around Arkansas are pressing lawmakers to give consumers an annual sales-tax holiday, a break that all but one of the surrounding states already offer, according to the Associated Press.

A lobbyist for Dillard’s and the head of the state's retail merchants association told a legislative panel Thursday they support the state enacting an exemption on the sales tax at the beginning of the school year.

"We see an increase in our stores across the board on weekends when there is a sales-tax holiday," Dean Elliott, the chain's director of governmental affairs, told the House and Senate Revenue and Tax committees Thursday. "By not having a sales-tax holiday in Arkansas, we are losing revenue to other states."

All the states bordering Arkansas except for Mississippi offer consumers a sales-tax holiday, typically tied to the beginning of the school year. Louisiana, Tennessee and Texas offer sales-tax holidays during the spring and fall, according to the Federation of Tax Administrators.

Rep. Clark Hall, D-Marvell, told colleagues that he's working on legislation to introduce during next year's session to enact a sales-tax holiday during the first weekend in August on clothing, school supplies, computers, software and school instructional materials.

Lawmakers have tried unsuccessfully in past years to create a holiday on sales taxes, and a proposal last year died without any action or discussion, according to the Associated Press. The proposal may be boosted by the support of Dillard's, the report said.

State fiscal officials estimate that the three-day tax exemption would cost the state about $5 million a year in tax revenue, but Department of Finance and Administration Deputy Director Tim Leathers told lawmakers he did not know how much additional tax revenue might come in by consumers buying other items during the tax weekend.