July 2007 Column Winner
Take Your Lawyer To Tax-Free Day
By Wayne Trotter, The Tecumseh Countywide News
The countdown has started.
Only about two weeks remain until Oklahoma joins a lot of the rest of the civilized world by instituting its first-ever back-to-school sales tax holiday.
All this started with a three-day $100 clothing exemption in Texas in 1999 and spread like wildfire. Iowa was second in line in 2000 with another $100 exemption. A year later, Connecticut upped the ante to $300 for clothing and stretched its holiday to six days. Ivy League pants still cost more than blue jeans.
Now 14 states and the District of Columbia are playing the game. In one, Louisiana, you can buy up to $2,500 in personal property of any type without paying state sales taxes - provided you make those purchases on August 3 or 4. Twenty-five hundred bucks of what a lot of Louisiana folks look upon as "personal property" covers a great deal of territory, let me tell you.
So the new guy on the block is Oklahoma and it essentially went back to the original Texas concept of stripping sales taxes from anything costing a hundred bucks or less during the period beginning August 3 and ending August 5.
One of the ideas was to keep Oklahomans living near the Red River out of Texas but the Lone Star State outsmarted everyone. It changed its holiday this year from August 3-5 to August 17-19. Now people along the Red can do it twice.
You'd think this whole thing was a presidential primary, wouldn't you?
No matter. All you have to do two weeks from now on Friday is load up the kids in the family jalopy and head out for any store in Oklahoma.
And, oh yes, don't forget to stop to pick up your lawyer.
Why the lawyer? Because you may need legal advice. This can be a complicated thing.
For instance, you can buy a Halloween costume complete with a mask and pay no sales tax as long as the costume comes in at $99.99 or less. But if you buy a mask by itself, you should pay the tax.
Here are some examples of Sooner logic straight out of Oklahoma's new law which, we feel confident, was largely based on Texas' old law:
• "A pair of shoes sells for $198.00. The pair of shoes cannot be split in order to sell each shoe for $99.00 to qualify for the exemption." 710-65-511D, Paragraph 1A.
OK. So nobody ever sells shoes a half pair at a time anyway. Let's move on to Paragraph 2A:
• "A seller offers 'buy one, get one free' on a pair of shoes. The first pair of shoes has a sales price of $99.00 and the second pair is free. Both pairs of shoes will qualify for the exemption because the first pair of shoes does not exceed the less than $100.00 exemption limitation."
But, as Paragraph 2B explains, not everything is equal:
• "A coat is purchased for $120.00 and a second coat is purchased for half price ($60.00) at the same time the first coat is purchased. The second coat will qualify for the exemption, but the tax will be due on the first coat. In this example, the sales price of the items may not be averaged in order to qualify for the exemption."
You may also have noted that when the tab goes over a hundred bucks on a single item, the full tax is paid but you can keep buying $99 items and pay no tax at all. Why? Because it's the law.
Furthermore, a coupon issued by the seller can be counted toward the price if it brings the total to less than a hundred bucks. But a coupon issued by the manufacturer doesn't count. Why? Ask your friendly legislator.
There's your sales tax holiday, Oklahoma style. It beats nothing and it will help, especially since the retailers will have figured most of this out by the time you get to the store.
But if you'd like to buy something relatively hassle-free, drive to Louisiana or stop by and pick up your attorney. Just make sure his or her bill isn't higher than what you think you'll save.
Posted on Sun, July 15, 2007