For students, back-to-school time can be exciting, catching up with friends and sharing their summer stories. For Ohio parents, back-to-school time soon will also be a little less expensive.
In a few days, Ohio will offer its first sales tax holiday. Eligible items purchased during the weekend of August 7-9 will be tax-free thanks to a new law passed this year by the Ohio General Assembly and signed by Governor John Kasich.
This relief from sales tax will apply to purchases of clothing, school supplies and materials whether from a store, on-line or from a catalog. There is a price limit of $75 per item of clothing and $20 per item of supplies and materials. There is no limit on the total amount or quantity of goods purchased.
We are all aware that getting children stocked up with school supplies can put some strain on the family budget. This sales tax holiday will ease that burden for families across Ohio. The Department of Taxation has estimated that this weekend-long event collectively will save Ohio families more than $25 million. That’s money families can put away for future use or perhaps to purchase additional merchandise.
The sales tax holiday, as approved, is a one-time event but giving Ohio families and businesses a break from tax is not a limited-time offer. Governor Kasich has made cutting taxes a top priority since he came into office. With the most recent two-year state budget, the Governor will have reduced taxes by about $5 billion since 2011, the largest tax cut of any state in the country.
Individual taxpayers have seen their state tax reduced by 16.3 percent; most businesses owners, particularly those running small businesses, have enjoyed significant tax cuts the past two years and will see the tax on their income eliminated next year. Governor Kasich, partnering with Ohio lawmakers, is committed to reducing the income tax burden even more, believing that leaving additional money in the pockets of Ohioans will drive economic activity and job creation.
The sales tax holiday is consistent with this belief. Ohio consumers will have more disposable income and their purchases will benefit retailers doing business in Ohio. After the holiday is over, we will be evaluating the impact on Ohio’s economy and the business community and preparing a report for state lawmakers to study as they decide whether to offer up a tax-free weekend again next year, or perhaps make it permanent.
We have been watching the interest grow across the state as businesses, public officials and tax practitioners spread the word about this unique event. I suspect that, just like for their children, back-to-school time this year also will be exciting for Ohio parents because they took advantage of the sales tax holiday. If you’d like to learn more, please visit tax.ohio.gov. Happy shopping.