On Wednesday, April 27, the Ohio House of Representatives joined the Ohio Senate in approving the back-to-school Sales Tax Holiday for the second year in a row. This Year’s Sales Tax Holiday will fall during the days of August 5th through August 7th. The bill, known as Senate Bill 264, now just needs Governor John Kasich’s signature to be official.
According to a study by the University of Cincinnati Economics Center, last year’s Ohio Sales Tax Holiday generated $4.7 million in sales tax revenues statewide and saved taxpayers $3.3 million on $46.75 million of back-to-school related purchases. The study also showed a measureable increase in sales of Ohio counties that border other states. These counties experienced a 15.48 percent increase in their sales tax collections, compared to an increase of 4.56 percent in non-border counties. This large number of “cross-border” sales is due to Ohio being the only state in the Midwest to offer a sales tax holiday on back-to-school items.
The bill uses nearly the exact same language as last year’s Sales Tax Holiday, letting shoppers purchase clothing priced at $75 or less, school supplies priced at $20 or less, and school instructional materials priced at $20 or less without paying state or local sales tax. Also similar to last year, this event will be open to everyone shopping at Ohio stores, not just families with children attending school.
Keep in mind there are a few stipulations to this holiday. Most notably, any item used in a trade or business is not eligible for the tax exemption. For example, school supplies such as binders and notebooks to be used in a business are ineligible. Additionally, clothing accessories including jewelry and handbags do not qualify as clothing and are therefore not exempt from sales tax.
Items sold by mail, phone, or the Internet will qualify for the tax holiday if the consumer orders and pays for the item and the retailer accepts the order during the holiday period. Shipping and handling charges shall also be exempt from sales tax if all items in the order qualify for the exemption. If some of the items in the order are ineligible, sales tax will be charged on the shipping and handling costs of those specific items.