(The Center Square) – Missouri is one of 19 states with a sales tax holiday as taxpayers won’t pay any state or local sales taxes on certain items this weekend.
The 2024 “Back-to-School Sales Tax Holiday” will run from 12:01 a.m. on Friday, Aug. 2, until Sunday, Aug. 4, according to the Missouri Department of Revenue. This is the second year all sales taxes will be exempted for specific items. Most schools in Missouri will be back in session in a few weeks.
Senate Bill 153, a 205-page bill commonly referred to as the “Wayfair Law,” enabled collection of sales and use taxes from businesses not physically located in Missouri. The bill projected the online sales taxes would outweigh the loss of revenue from the sales tax holiday weekend.
Before 2023, hundreds of cities, counties and special tax districts could opt out of the tax holiday, leaving consumers with the task of searching for political subdivisions opting into the holiday. The state sales tax in Missouri is 4.225%, but additional local sales taxes added as much as an additional 6% in some municipalities.
According to information from Missouri’s Office of Administration, $291,631,472 in sales and use taxes were collected last August during the first year of the all-in sales tax holiday, an increase of $259,126 from August 2022 ($291,372,346) but less than the amount from August 2021 ($298,136,021).
“While these revenue losses may not be particularly large, they still have to be offset by revenue generated elsewhere, which is a net negative for states’ overall economic health since other revenue sources are often more economically damaging than sales taxes,” Joseph Johns and Benjamin Patrick wrote in a blog post for the Tax Foundation. “And states that can consistently cover these holidays out of surplus revenues could better utilize their excess funds on more economically efficient tax reforms, particularly rate reductions.”
Others see the holiday as a way to promote the state’s economy.
“Shopping at your local mom-and-pop keeps more hard-earned dollars within your community,” Brad Jones, Missouri director of the National Federation of Independent Business, said in a statement. “Main Street is the backbone of our economy, creating good-paying jobs for our friends and family. As frequent donors to charity and sponsors of Little League teams, small business owners keep our communities vibrant and growing. We hope that Missourians will turn to their small businesses for their back-to-school supplies during this sales tax holiday.”
The Missouri Department of Revenue listed the following as exempt from sales taxes during the three-day event:
-Clothing: any article having a taxable value of $100 or less;
-School supplies: not to exceed $50 per purchase;
-Computer software: taxable value of $350 or less;
-Personal computers: not to exceed $1,500;
-Computer peripheral devices: not to exceed $1,500;
-Graphing calculators: not to exceed $150.
