Corpus Christi Caller Times Caller.com - Shoppers get a sales tax break Aug. 6-8

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Friday, July 16, 1999

Shoppers get a sales tax break Aug. 6-8
Tax holiday is first-ever in state
By Anna M. Tinsley
Scripps Howard Austin Burea

John Kennedy/Caller-Times

Peggy Hattersley of Portland sorts through a clearance rack at Target in Moore Plaza. On August 6-8, shoppers will be able to purchase most shoes and clothes without paying state and local sales tax.

AUSTIN - Texans shopping for shoes and clothes Aug. 6-8 will notice something different about their purchases: No sales tax.
   During those 72 hours, Texans will see their first-ever sales tax holiday - part of state lawmakers' efforts earlier this year to give money back to taxpayers.
   That means for three days, children and adult clothes and non-athletic shoes that cost less than $100 will be exempt from state and local sales taxes.
   "The tax burden on working Texas families is too high,'' state Comptroller Carole Keeton Rylander said. "The typical American family pays more in total taxes than it spends on food, clothing and shelter combined. The tax holiday will provide Texans with some much needed relief.''
   Shoppers could save about $8 for every $100 they spend, estimates show. The state sales tax is 6.25 percent on each dollar of sales. Local governments can add as much as 2 percent more for a total of 8.25 percent, according to the comptroller's office. Corpus Christi's sales tax rate is 7.875 percent.
   Overall, the tax break is expected to save Texans $69.2 million in state sales taxes and as much as $15.5 million in city and county sales taxes in the next two years, comptroller reports show.
   State lawmakers said the goal for this tax cut was to help those who need assistance the most.
   "We wanted to do some tax cuts that help families and working people,'' said state Rep. Vilma Luna, D-Corpus Christi. "The sales tax is very high in some areas.
   "People know this may not save them a lot, but every little bit helps,'' Luna said.
   The holiday occurs during a month when many Texans buy back-to-school clothes.
   State Rep. Gene Seaman, R-Corpus Christi, said it might be hard for most people to do all of that shopping in three days, but he believes hundreds of thousands of Texans will take advantage of the sales tax holiday.
   "The problem is, that's an awful lot of people coming in to do their shopping,'' he said. "I'd hate to stand in the doorways at the mall during those three days.''
   Most clothes and shoes priced at less than $100 will be exempt from sales taxes. Customers will get a break on individual items, regardless of the amount they buy, according to the comptroller's office. For example, sales tax isn't due if a person buys six shirts, each priced at $99. But the full tax must be paid on a shirt if it's sold for $101.
   Items sold in pairs can't be separated and sold individually. If a pair of shoes costs $150, each shoe can't be sold for $75 to qualify for the tax exemption.
   Clothes and shoes used mainly for athletic activities or protective wear aren't eligible for the exemption. Golf cleats and football pads, for example, aren't tax-free. But the tax will be waived on athletic wear commonly used outside of the athletic arena, such as tennis shoes, baseball caps and jogging suits.
   Not included in the sales tax holiday are accessories, such as jewelry and watches, or items that are carried rather than worn, such as handbags, briefcases and wallets. Also not included are rented clothes, such as formal wear and costumes.
   Retailers have a list of the types of items that fall under the exemption.
   This year, both state and local sales taxes will be waived. In the future, the state tax will be waived but cities, counties and other taxing groups will have the option of not participating in the tax holiday, according to the comptroller's office.
   The tax holiday is part of a $506 million package of tax cuts lawmakers passed this year that ranges from eliminating sales taxes on over-the-counter medicines starting in April to franchise tax breaks for small businesses.



Scripps Howard Austin Bureau writer Anna M. Tinsley can be reached at (512) 478-9644 or by e-mail at tinsleya@scripps.com

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