The ABCs of Ohio’s Back-to-School Sales Tax Holiday

Back-to-school shopping just got a little better for Ohio taxpayers due to the recent enactment of Senate Bill 243 which exempts the purchase of clothing and school supplies from Ohio sales / use tax for three days in August 2015. Ohio’s “sales tax holiday” will occur on August 7 – 9 and is expected to save Ohio families approximately $78 million pursuant to a report by the Economics Center at the University of Cincinnati. This report also estimates that Ohio retail sales will increase by approximately 4.8% during the month of August as a result of the sales tax holiday. Ohio Senator, Kevin Bacon, the bill’s sponsor, hopes the sales tax holiday will “create a ‘black Friday-like’ excitement during those three days.” Those opposed say it is political and represents bad tax policy.

The tax exemption applies to items of clothing, up to $75 each, and items of school supplies and instructional materials, up to $20 each. The bill defines “clothing” as all human wearing apparel suitable for general use, but does not include items used in a trade or business, accessories, or sports or protective equipment. “School supplies” means items commonly used by a student in a course of study and includes such items as book bags, crayons, erasers, notebooks, pencils, and pens. Finally, the bill defines “school instructional materials” as reference books, reference maps and globes, textbooks, and workbooks.

If a consumer makes a qualifying purchase from an Ohio retailer, the purchase is exempt from Ohio sales tax. Similarly, if the consumer makes a qualifying purchase outside Ohio, for example, over the Internet, but the item is used in Ohio, the sale is exempt from Ohio use tax. This bill is a one-year pilot program that will require future approval for its continuation.

If you have any questions regarding Ohio’s sales tax holiday or any other Ohio sales / use tax issues, please contact Steve Dimengo, Rich Fry, or Casey Davis.

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