LITTLE ROCK—Wal-Mart Stores Inc., Dillard’s Inc. and small retailers around Arkansas are pressing lawmakers to give consumers an annual sales tax holiday, a break that all but one of the surrounding states already offer.

A lobbyist for the Dillard’s department store chain and the head of the state’s retail merchants association told a legislative panel Thursday they support the state enacting an exemption on the sales tax at the beginning of the school year.

“We see an increase in our stores across the board on weekends when there is a sales tax holiday,” Dean Elliott, the chain’s director of governmental affairs, told the House and Senate Revenue and Tax committees. “By not having a sales tax holiday in Arkansas, we are losing revenue to other states.”

All the states bordering Arkansas except for Mississippi offer consumers a sales tax holiday, typically tied to the beginning of the school year. Louisiana, Tennessee and Texas offer sales tax holidays during the spring and end of summer, according to the Federation of Tax Administrators. Missouri and Oklahoma offer the holiday in the summer.

Polly Martin, head of the Arkansas Grocers and Retail Merchants Association, said small stores hurt when consumers can easily travel to neighboring states for the temporary exemptions.

“Mainly, it’s the smaller retailer that needs it more than the larger retailer,” Martin said.

A lobbyist for Bentonville-based Wal-Mart who attended Thursday’s meeting didn’t speak in favor of the tax break, but later said the company supports the sales tax holiday. “We are supportive of the effort to create a sales tax holiday in Arkansas because the sales tax holiday is good for our customers,” said Laurie Smalling, Wal-Mart’s senior manager for public affairs and government relations.

Rep. Clark Hall, D-Marvell, told colleagues he was working on legislation to introduce in next year’s session to enact a sales tax holiday during the first weekend in August on clothing, school supplies, computers, software and school instructional materials.

A draft bill by Hall would exempt from state sales tax clothing items that cost $100 or less, school supplies that cost $100 or less and computers, software or equipment that cost $750 or less during that weekend. Hall said he may change some of the amounts before introducing the bill.

Lawmakers have tried unsuccessfully in previous sessions to create a holiday on sales taxes, and a proposal last year died without any action or discussion. The proposal may be boosted by the support of Dillard’s, which is based in Little Rock and has stores in 29 states.

Rep. Donna Hutchinson, R-Bella Vista, who also has said she’s working on sales tax holiday legislation, said that neighboring Missouri stores include Arkansas schools when they list the back-to-school items that parents should buy for their children during that state’s tax holiday.

“They are recruiting our customers,” Hutchinson said. “It’s not just a soft sell. This is hard recruitment.”

The pitch for the holiday faces a challenge with Gov. Mike Beebe pledging that his top issue other than education next year will be continuing a reduction in the state’s sales tax on groceries that began last year. A spokesman for Beebe said the governor has not decided on a specific cut on the grocery tax to put before lawmakers next year.