Wednesday, May 9, 2007

"Back to School" Sales Tax Holiday Should Be Signed

By Senator Jay Paul Gumm - D-Durant

Hello again, everybody! As most of you know, for as long as I have served as senator, one of my top legislative priorities has been to enact Oklahoma’s version of the “Back to School” sales tax holiday.

Why is this issue so important? For years, Texas shoppers – and those Oklahomans who cross the border – enjoy tax-free shopping during the first weekend in August on clothing and shoes costing less than $100 per item.

Millions of dollars in economic activity and sales tax revenue are lost from Oklahoma every year as thousands of our residents cross the border for the sales tax exemption. In addition to the revenue loss our cities, counties and the state endure, Oklahoma’s retailers are at a huge competitive disadvantage that weekend.

Even more heartbreaking, those Oklahoma families who cannot afford to make a trip to Texas are stuck paying the full sales tax on back to school clothes. That is incredibly unfair.

The greatest roadblock to passage of a “Back to School” sales tax holiday has been city governments. Many of them opposed the measure because they fear city revenues would be decreased by having to honor the tax exemption.

Cities have stubbornly maintained that position despite the fact that in every state that has enacted a “Back to School” sales tax holiday, tax revenues increased rather than decreased. Even the facts could not bring around the Oklahoma Municipal League, the cities’ lobby group.

This year, however, we added a component to the sales tax holiday we hoped would get the Oklahoma Municipal League to support the measure. Cities would be reimbursed by the state for money they would lose by honoring the tax cut. While we never got their support, we were able to quell their opposition enough to get this measure in the tax cut package agreed to by legislative leaders.

That package is now on Governor Henry’s desk awaiting his signature. You would think getting the governor’s signature would be a “slam dunk,” because he included the “Back to School” sales tax holiday in his legislative agenda in 2006. However, there is an ongoing battle over the state budget, and tax policy is part of that discussion.

It is possible the governor will veto the overall tax package, including the sales tax holiday, in order to help force a budget agreement. I certainly hope that is not the case.

Oklahoma families need and deserve this tax cut; Oklahoma retailers deserve a level playing field for back to school shopping. We have come so far, and – reaching across party lines – we have gotten this important issue on the governor’s desk for the first time.

Regardless of what happens with this measure, I will continue to fight as hard as I can to see that a “Back to School” sales tax holiday becomes law. Oklahomans deserve nothing less.

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