Missouri children may not be ready to think about going back to school, but the parents shopping for back-to-school gear are looking forward to Friday, Aug. 7.
That's the first day of Missouri's annual three-day Back to School Sales Tax Holiday, a time when shoppers buying clothing, school supplies or computer hardware or software don't pay the state's 4.225 percent sales tax.
The statewide holiday also gives cities and counties the option of offering a holiday on their own sales taxes or opting out of participation - and in this tough economy, most southwest Missouri municipalities are holding on to their tax revenue.
All five counties in the Springfield metropolitan statistical area - Greene, Christian, Dallas, Polk and Webster - have opted out, as have Taney and Stone counties in the Branson area.
Area towns opting out of the holiday include Springfield, Nixa, Ozark, Willard, Branson, Joplin, Stockton and Marshfield.
Springfield City Finance Director Mary Mannix Decker said that, while the city takes every opportunity to encourage its citizens to shop locally, the city can't afford to give up any potential revenue sources. City sales tax revenues are expected to generate 47 percent of Springfield's $95.8 million general fund revenue in the fiscal 2010 budget.
"We have faced significant budget cuts for two years in a row that have cut into city services," she said. Service cuts have included elimination of some of the city's community policing programs and rotating closures of city fire stations.
"So to take a voluntary decrease in our revenue I think would make our whole situation that much more severe," Decker added.
Decker pointed to the city's sales tax figures for July, the first month of fiscal 2010, as justification for opting out. City sales tax revenue was down 15.1 percent, or about $548,000, compared to July 2008.
"Especially this year with revenue being down, to forgo any potential revenue would put additional stress on our budget, and that would be difficult to handle," she said.
The state is not faring much better; sales tax for fiscal 2009, which ended June 30, totaled $1.88 billion, down 5.9 percent from fiscal 2008.
Ted Farnen, communications director for the Missouri Department of Revenue, said the state doesn't estimate how much sales tax it gives up through the holiday, but state officials tout the event as a way to help residents in a financial crunch stretch their budgets.
"During these times when every dollar counts, it makes sense to save as much money as possible, and this holiday provides an excellent opportunity to accomplish that goal," Gov. Jay Nixon said in a news release.
Among the cities that are participating in the holiday are Republic and Rogersville.
Including state sales tax, shoppers in Republic will save 7.725 percent on eligible purchases during the holiday.
"By participating in this sales tax holiday, the city of Republic hopes to help area citizens ... and also help area businesses with their sales," the city said in a news release. "In return, the city is hoping those same customers will recognize what great local businesses we have and will return to Republic for future sales."
While Springfield has opted to collect city sales tax during the holiday, Battlefield Mall is asking its retailers to offer an additional 5 percent discount, simulating the city and county sales tax breaks. The mall has offered similar promotions each year during the state event.
Mall Marketing Manager Christine Moses said not every store is participating - retailers make business decisions independently - but the three-day event lures in a significant number of customers.
"I can't give specific sales figures, but ... it's very comparable to the holiday season - that week or two before the holidays in December," Moses said. "That is very similar to the traffic flow we have on tax holiday weekend."
City Finance Director Decker hopes people use the opportunity to make purchases - and points out that the additional sales make it even more important for the city to hold on to that revenue.
"With a lot of people having sales during this time, that could impact us that much further if we didn't (collect our sales taxes)," she said. "We keep encouraging people to shop locally, and hopefully our sales tax revenue will come back."
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
