After the largest tax increase in state history was enacted in 2018, shoppers can look forward to the state’s annual sales tax holiday next week.

In Oklahoma, the average sales tax burden – combining state, county and municipal sales taxes – is almost 9 percent That ranks Oklahoma with the third highest average in this region, ahead of only Arkansas (9.43 percent) and Louisiana (9.45 percent). According to the Tax Foundation, Oklahoma has the No. 6 highest sales tax rate in the nation (see chart).

This year, the tax holiday runs from 12:01 a.m. Friday, August 2, through midnight on Sunday, August 4. During this holiday, sales of eligible clothing and shoes are exempt from sales tax. All qualified items are exempt from state, city, county and local municipality sales tax.

Retailers are required to participate in the three-day sales tax holiday .

The Oklahoma Legislature passed Senate Bill 861 during the 2007 Legislative Session to benefit both consumers and retailers. It was designed to keep shoppers from going to nearby states – like Texas – for back-to-school clothes during the sales tax holidays in those states.

According to the Oklahoma Tax Commission website, any clothing or footwear with the sales price of less than $100 is exempt. This does not apply to the sale of any accessories, special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except when used for athletic activity or protective use, or to the rental of clothing or footwear.

Accessories include jewelry, handbags, luggage, umbrellas, wallets, watches, and other similar items. The rental of clothing or footwear is also taxable.

If a retailer has a “bogo” (buy one, get one free) sale, the total price of items in the “bogo” cannot be averaged to qualify both items for the exemption. The exemption depends on the price paid for each item.

If a retailer offers a discount to reduce the price of an eligible item to less than $100, the item will qualify for the exemption. This applies to all discounts even if a retailer’s coupon or loyalty card is required to secure the discount. If a retailer accepts a coupon that entitles the retailer to third-party reimbursement, such as a manufacturer’s coupon, the discount provided by the coupon does not reduce the item’s sales price for purposes of determining whether the item is eligible for the exemption.

If a customer buys an eligible item during the sales tax holiday and later exchanges it for the same item in a different size or color, tax is not to be charged even if the exchange is made after the sales tax holiday. If a customer buys an eligible item during the sales tax holiday and returns the item after the tax holiday period for credit on the purchase of a different item, sales tax applies to the sale of the newly purchased item, even if it would have been eligible for the exemption during the sales tax holiday. If a customer buys an eligible item before the holiday period, but returns the item during the sales tax holiday period and receives credit on the purchase of a different item of eligible property, no sales tax is due on the sale of the new item.

Eligible items put in layaway will qualify for the exemption when final payment on the layaway is made and the item is given to the customer during the exemption period.

Eligible items sold to buyers by mail, telephone, email or Internet qualify for the sales tax exemption if the customer orders and pays for the item and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period.

Eligible items purchased during the sales tax holiday using a previously issued raincheck qualify for the exemption. If a raincheck issued during the sales tax holiday is redeemed after the sales tax holiday, the purchase is not tax exempt.

Here is a list of clothing that is exempt from sales and use taxes:

  • Aprons
  • Athletic supporters
  • Baby receiving blankets
  • Bathing suits and caps
  • Beach capes and coats
  • Belts and suspenders
  • Boots
  • Coats and jackets
  • Costumes
  • Diapers, children and adult,
  • Ear muffs
  • Footlets
  • Formal wear
  • Garters and garter belts
  • Girdles
  • Gloves and mittens
  • Hats and caps
  • Hosiery
  • Insoles for shoes
  • Lab coats
  • Neckties
  • Overshoes
  • Pantyhose
  • Rainwear
  • Rubber pants
  • Sandals
  • Scarves
  • Shoes and shoe laces
  • Slippers
  • Sneakers
  • Socks and stockings
  • Steel toed shoes
  • Underwear
  • Uniforms, athletic and non-athletic
  • Wedding apparel