Preliminary sales tax receipts from August show that Oklahoma’s Back-to-School Sales Tax Holiday increased state revenues by boosting economic activity, according to the chief legislative proponent of the measure.
Senator Jay Paul Gumm said that while saving parents millions of dollars on school clothing for their children, the three-day event in early August stimulated revenue growth for the state, exactly as supporters expected.
“Many of us predicted the Back-to-School Sales Tax Holiday would spur retail activity, and that is exactly what happened,” Senator Jay Paul Gumm said.
Gumm, a Democrat from Durant, was a co-author of the bill in the 2007 session of the Oklahoma Legislature that created the Back-to-School Sales Tax Holiday. He fought to pass the measure for several years. Gumm helped shepherd the measure through the legislative process taking on opponents who argued that it would reduce state and local revenues.
It was reported Tuesday that sales tax revenue for August increased by $4.6 million over 2006 totals for the same month and came in $4.8 million over the official state revenue estimate.
“Rather than leading to a loss of revenue, the economic activity associated with the Back-to-School Sales Tax Holiday actually stimulated revenue growth for the state. A better description might be to say this was a policy that caused the sales tax boost to happen—just as predicted,” Gumm said.
“More importantly,” the senator said. “Oklahoma families got to save money on back-to-school clothes and Oklahoma retailers were able to take advantage of the holiday to increase sales. It was a ‘win-win’ for state government and the people.”
The Back-to-School Sales Tax Holiday removed the state, county and municipal sales tax on articles of clothing and footwear costing less than $100. State officials estimate that shoppers saved $6.4 million in state sales tax along with millions more in county and local sales taxes.