The Senate author of the “Back-to-School” sales tax holiday said the tax cut, targeted directly to middle class families, will be among the first bills considered by the Senate Finance Committee.

Senator Jay Paul Gumm, D-Durant and chair of the Finance Committee, said he was pleased Gov. Brad Henry joined Senate Democrats in putting the sales tax holiday at the top of the tax cut agenda. The governor announced Wednesday the proposal would be a centerpiece of his tax cut agenda; Senate Democrats did the same a week earlier.

“A ‘Back-to-School’ sales tax holiday puts real money back into the pockets of middle class families who already contribute so much to Oklahoma’s growing economy,” Gumm said. “It is also critical to put Oklahoma’s retailers – many of them small businesses – on equal footing with retailers across the borders in Texas and Missouri.”

Both those states have sales tax holidays for back-to-school shopping. During the three-day holiday – the first weekend in August – the Texas and Missouri drain thousands of shoppers and millions of dollars from the Oklahoma economy.

Gumm, who is author of the “Back-to-School” sales tax holiday, said the Oklahoma version would be for the same days and the same items as the Texas holiday.

“Oklahomans would be able to stay home to avoid the sales tax on critical back-to-school items,” he said. “That would strengthen Oklahoma’s retail economy – especially small businesses on Main Streets in just about every community.”

Because cities and counties also would have to honor a state sales tax holiday, some of Oklahoma’s highest profile municipal leaders fought the proposal, claiming it would put a crimp in city budgets because of decreased revenues.

Gumm pointed to revenue figures from both Texas and Missouri as evidence that neither sales tax revenues nor budgets would suffer.

“The fact is that in both Texas and Missouri, local revenues held steady or increased because of greater retail activity during the sales tax holidays,” he said. “By keeping thousands of Oklahomans at home, we stand an even better chance to grow Oklahoma’s retail economy, which would primarily benefit cities that depend on sales taxes.”

Gumm said opponents of the holiday fail to take into account the thousands of Oklahoma shoppers who cross the Red River to take advantage of Texas’ law. When Oklahomans go to Texas, they complete their shopping lists, have a meal, see a movie or even spend the night, draining the Oklahoma economy of even more dollars.

“It doesn’t take a rocket scientist to figure out that money spent by Oklahomans in Texas never ends up in Oklahoma municipal coffers or in local Oklahoma economies,” he said. “Keeping shoppers at home that weekend will mean more money for cities that depend on sales tax revenue.”

The back-to-school sales tax holiday is critical for Oklahoma retailers who find themselves at a competitive disadvantage during Texas sales tax holiday weekend, Gumm said. Some Oklahoma retailers have taken to absorbing the cost of sales taxes in an effort to compete.

The former executive director of the Durant Area Chamber of Commerce, Gumm said Oklahoma retailers, many of which are small businesses, should not have to bear that burden.

“We owe our retail community better, as well as the thousands of Oklahomans who might not be able to afford a trip to Texas,” he said. “The Oklahomans who need this tax break the most are left behind if they can’t afford to make the trip south.”

In short, Gumm said, opponents of this holiday expect that the people who cannot afford to make the trip to Texas should pay more taxes. “That is indefensible,” he asserted.

Gumm said a progressive tax cut like the back-to-school sales tax holiday is not only a winner for working and middle class families, but also for small business owners, city governments and the entire state. In addition, money not collected by cities in the form of sales tax will find its way into municipal coffers on other purchases and increased economic activity.

“I am tired of seeing Texas benefit at the expense of Oklahoma families and retailers,” Gumm concluded. “I intend to use every legislative means at my disposal to see that this shameful practice comes to an end next year with passage of the Oklahoma ‘Back-to-School’ sales tax holiday.”

For more information contact:
Senator Gumm's Office - (405) 521-5586