TEXAS tax program popular with Oklahomans

OKLAHOMA CITY (AP) _ Susan Hanna's annual trek to Texas started out as just a long weekend shopping junket with some girlfriends. <br><br>But the timing of Hanna's excursions south of the Red River

Monday, August 6th 2001, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ Susan Hanna's annual trek to Texas started out as just a long weekend shopping junket with some girlfriends.

But the timing of Hanna's excursions south of the Red River took on new urgency a couple of years ago when Texas inaugurated a sales tax holiday for back-to-school shoppers during the first weekend in August.

``And then it was like, oh, cool, we like this,'' Hanna said.

The three-day tax holiday, which ends Sunday, permits shoppers to purchase clothing and footwear tax-free as long as the price of each article is less than $100. Shoppers save about $8 on every $100 they spend. Oklahoma's state sales tax is 4.5 percent, but additional local sales tax brings the overall rate to about 8 percent in most areas of the state.

``The reality is we definitely save money on clothes,'' said Hanna, who travels 200 miles from her home in Oklahoma City to Dallas to find the best bargains. ``We hit the sales along with the tax-free situation.''

``The people I'm going with are spending a small fortune. To me it's just the perfect thing for back to school.''

They are part of an annual migration of Oklahoma shoppers who go to Texas each year during tax holiday to stock up on clothing and other merchandise.

``Our mall does about 60 to 65 percent Oklahoma traffic,'' said John Kellogg, general manager of the Gainesville Outlet Shopping Mall, a collection of 79 stores just across the Oklahoma border along Interstate 35.

``This weekend will be very busy and a lot of that comes from Oklahoma,'' Kellogg said. ``Last year was up 14 percent.''

While popular with Oklahoma shoppers, Texas' retail bonanza has hurt Oklahoma merchants, especially those close to the border.

``We do feel as though it hurts us. It does hurt our economy here,'' said Stephanie Andrews, vice president of the chamber of commerce in Ardmore, 30 minutes away from the Gainesville shopping mall.

``You can call it a gimmick. You can call it what you want. But it does attract people,'' said state Rep. Danny Hilliard, D-Sulphur, whose district lies less than one hour away from the mall.

``Probably the most dangerous place to be today is the southbound lane of I-35.''

``There goes our money again, rattlin' around in Texas' economy,'' said state Rep. John Sullivan, R-Tulsa, one of several lawmakers who supports creating a sales tax holiday in Oklahoma.

``It's like Christmas in August,'' Sullivan said. ``Everybody in the border towns are going to run over to Texas and spend their money.''

Legislation was introduced this year to create an Oklahoma's sales tax holiday coinciding with the one in Texas. But it was heavily amended to expand its length as well as the number of tax-exempt articles, and it ultimately failed.

``I wish they would just pay attention to the dollars lost,'' said Toni McBride, manager of The Buckle, a men's and women's clothing store in Moutainview Mall in Ardmore.

``We were hoping that we would have this promotion here this year. We're losing so many dollars.''

A sales tax holiday in Oklahoma would cost the state an estimated $6 million in sales tax revenue annually, according to estimate prepared for the legislature. Texas officials say the 1999 and 2000 tax holidays saved taxpayers a combined $69.6 million in state and local taxes.

The Oklahoma Retail Merchants Association wants a sales tax holiday in this state, said Scott Mitchell, the group's executive vice president.

``We've worked on it for three years,'' Mitchell said. ``This thing is very popular. They are killing Oklahoma retailers.''

``Obviously, we don't want our people going to Texas,'' said Dick Vavrina, manager of a Sears store in Oklahoma City.

But an Oklahoma sales tax holiday has drawn opposition from the Oklahoma Municipal League, which is concerned about the loss of sales tax revenue to pay for municipal services.

``How will it be funded?'' said Diane Pedicord, the OML's general counsel. ``Should it be solely at the expense of merchants or solely at the expense of government?''

Some Oklahoma merchants have taken matters into their own hands and are offering discounts during the Texas sales tax holiday.

At Crossroads Mall in Oklahoma City, almost 80 stores have discounted merchandise by at least 7.785 percent _ the amount of the local sales tax, said Christi Parks, the mall's marketing director. Similar promotions have been offered by merchants in Bartlesville and Dewey.

``We know traffic has picked up. People are really jumping on the bandwagon here to take advantage of it,'' Parks said.