This year's Missouri sales tax holiday includes local assessments

Aug. 1—This weekend's back-to-school sales tax holiday in Missouri marks the first year that those purchases will be exempt from city and county sales taxes as well as state sales tax.

Missouri state Treasurer Vivek Malek on Tuesday visited Southwest Missouri to talk about the sales tax holiday and to encourage parents to put any savings they receive from the tax waiver into MOST 529 savings accounts for future education costs.

Malek visited the Missouri Southern State University campus after a similar stop at Crowder College in Neosho where he discussed the MOST 529 education investment accounts.

"He has worked to educate parents on the MOST 529 program, which is a great opportunity for families to save for a college education," said MSSU President Dean Van Galen in introducing Malek. "It's really relevant to our vision here at Southern as we strive to provide a really high-quality education for our students at an affordable price."

Malek said he, like Van Galen, is a firm believer in education. "My life changed because of it, and I believe firmly that this can also impact our next generation," the treasurer said.

MOST 529 accounts earn interest tax-free to help increase savings for college educations.

In the greater Joplin area, there are nearly 2,000 of the accounts with assets totaling more than $31 million. "That's a very sizable amount," the treasurer said. Total accounts in the state number 190,000, he said, with assets of $3.9 billion.

Missouri started a 529 program in 1999. The accounts work like an individual retirement account in terms of being eligible for rollovers into other 529 investment accounts and transferral to beneficiaries. The money accumulated in those accounts can be used not only for college education expenses but to pay tuition at private elementary and secondary schools, technical schools or for career training and other related costs. Student loan payments also can be made from the accounts.

Malek said people can get more information about the investment program or open a 529 account online at www.missourimost.org or via the state treasurer's office.

Missouri's sales tax holiday started in 2003 so that families would not have to pay the state sales tax of 4.225% to buy clothing and supplies and other needs for students going back to school. But cities like Joplin, Carthage, Carl Junction and Neosho were among about 150 cities that opted out of the holiday to continue to collect local sales tax.

A change in state law in 2021 that took effect this year primarily mandates no city or county may collect sales taxes on back-to-school purchases during the weekend observance.

Richard Sheets, executive director of the Missouri Municipal League, said the change came as the result of adoption of a state law that allowed local taxing entities to collect use taxes on online or out-of-state sales.

"We had to make the change so it would be consistent because businesses across the nation would not know which cities collect the taxes" during the sales tax holiday, Sheets said.

The state has estimated that it will cost cities and counties about $465,000, but Sheets said that would be made up by the recently allowed use tax collections.

"We are unable to estimate the impact of this for a single weekend," said Leslie Haase, the city of Joplin's finance director.

Joplin's use tax is in its first full year of collection and has generated more than $3.7 million so far.

Combined sales taxes for the state, the city of Joplin and Jasper County amount to 8.725% but can range up to 9.725% within the city limits in areas that have special taxing districts such as tax increment financing or community improvement districts.

Items to be exempt from sales tax Friday through Sunday:

—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.