The Senate bill would create a Sales Tax Holiday following the same criteria as the 2015 holiday, letting consumers skip sales tax on all clothing purchases of up to $75 per item, and all school supplies and instructional materials priced at up to $20 each.
CLEVELAND, Ohio -- The Ohio Senate has paved the way for Ohio to host another three-day, back-to-school Sales Tax Holiday this August, voting 31-1 on the proposal before sending it to the House.
The vote came shortly after Focus on Ohio's Future, the research arm of the Ohio Council of Retail Merchants, presented data from the University of Cincinnati Economics Center that Ohio's one-time 2015 sales tax holiday saved Ohio consumers $3.3 million in taxes and raised another $4.7 million in Ohio sales tax revenues.
The Senate bill would create a holiday following the same criteria as the 2015 holiday, letting consumers skip sales tax on all clothing and shoe purchases of up to $75 per item, and all school supplies and instructional materials priced at up to $20 each.
The 2015 holiday was held Aug. 7-9, as families were heading back to school. Purchases were not limited to families with schoolchildren, but were open to everyone shopping at Ohio stores.
"Lead sponsor Senator Kevin Bacon of Columbus, Senate President Keith Faber and the entire Ohio Senate have shown great leadership today by passing an extension of the sales tax holiday," said Gordon Gough, president and CEO of the Ohio Council of Retail Merchants, in a statement.
"Last year's sales tax holiday generated $3.3 million in savings to Ohio taxpayers while adding another $4.7 million in state and local sales tax revenues, according to a University of Cincinnati Economics Center study," Gough said.
"In border counties, the study showed the holiday boosted sales by almost 15.5 percent, a real lift to Ohio's retail industry. As the only Midwestern state with a sales tax holiday, Ohioans are reaping the benefit of being 'early adopters.'
"We expect next year's sales tax holiday will be even greater for all Ohioans," Gough said.
The Economics Center reported that consumers saved about $3.3 million on $46.75 million worth of back-to-school purchases. Sales tax collections rose 9 percent over the tax holiday weekend, including items that were bought in addition to items that were tax-exempt.
The State of Ohio collected an estimated $100 million in sales taxes over the weekend, and netted $4.7 million in additional tax revenue.
"We compared the actual retail sales data from August 2015 to what was forecast for that month and determined that sales were 6.48 percent higher than what our model predicted, indicating a gross increase of $8 million in sales tax collections," said Julie Heath, Alpaugh Professor of Economics and director of the Economics Center, in a statement.
And unlike what some people had predicted would happen, "we also determined that the sales tax holiday did not 'cannibalize' sales tax revenues from other months, as economic data shows July and September sales matched their regularly anticipated levels," Heath said.
The University of Cincinnati Economics Center study is posted online at FocusonOhiosfuture.com/published-research
Part of that additional sales tax revenue came from out-of-state consumers whose states didn't offer sales tax holidays. "Those Ohio counties that border other states experienced a 15.48 percent increase in their sales tax collections, compared to an increase of 4.56 percent in non-border counties," Heath said.
The Ohio Council of Retail Merchants, founded in 1922, is Ohio's oldest and largest advocate for the retail industry, and represents more than 6,400 retailers statewide. Ohio's retail industry accounts for $43.3 billion of Ohio's annual Gross Domestic Product and supports 1.5 million jobs, or 1 in 4 of all Ohio jobs, making it one of the state's largest industries.