Ohio is the first state in the Midwest to offer a tax-free holiday for back-to-school shopping, which might bring buyers in from neighboring states Aug. 7 through 9, said Gordon Gough, president and chief executive of the Ohio Council of Retail Merchants.
CLEVELAND, Ohio -- Only 16 days until Ohioans can take advantage of the state's first-ever state tax holiday on back-to-school purchases of clothing, shoes and school supplies Aug. 7 through 9.
With 1.1 million pupils and more than 500,000 students in Ohio colleges, one in seven Ohio families has students headed to school this fall.
Gordon Gough, president and CEO of the Ohio Council of Retail Merchants Among the 18 states that currently offer sales tax holidays, Ohio is the first state to do so in the Midwest, said Gordon Gough, president and chief executive of the Ohio Council of Retail Merchants. That might help stem the tide of shoppers who cross the border into Pennsylvania to take advantage of tax-free clothing purchases.
"Four of the five states that touch Ohio do not have a sales tax holiday," and the media in those bordering states are already touting Ohio's event as a way to save money, he said.
"Taking an additional 7 percent off one notebook might not seem like much, but when you're spending hundreds of dollars on everything from diapers and shoes to books and school supplies, the savings add up big," Gough said.
"Nationwide, consumers are expected to spend more than $68 billion for back-to-school items," making it a "significant annual event for Ohio families," he said.
When the Ohio Council of Retail Merchants asked the University of Cincinnati Economics Center how a state tax holiday would affect Ohio's economy, it concluded that any loss in revenue from uncollected sales taxes would be more than offset by increased buying.
Ohio will hold its first tax-free back-to-school shopping holiday Aug. 7-9. The National Retail Federation's annual back-to-school spending survey says families with kindergarten through 12th-grade students expect to spend an average of $630.36 on electronics, apparel and other school needs, down from last year's $669.28.
Families of college students expect to spend an average of $899.18, slightly less than last year's $916.48.
"These tax holidays have triggered 'Black Friday'-style crowds in other states," Gough said. "Consumers love to save money, and we expect Ohioans to really enjoy this tax break in August."
The sales tax holiday applies to both online and brick-and-mortar retailers, for purchases made from 12:01 a.m. Friday, Aug. 7, through 11:50 p.m. Sunday, Aug. 9.
Legislation passed last year means Ohioans won't have to pay sales tax on purchases of clothing and footwear priced at up to $75 per item, as well as school supplies and instructional materials priced at up to $20 per item.
Consumers can buy as much as they want of eligible items, as long as the retail price for each item does not exceed the limit.
Isaiah Bush, 7, browses the shoes at Famous Footwear in Fenton, Missouri, in this file photo from the St. Louis Post-Dispatch. Families of K-12 students expect to spend $630.36 on back-to-school shopping. The state defines clothing as "all human wearing apparel suitable for general use," including but not limited to "shirts, blouses, sweaters, pants, shorts, skirts, dresses, uniforms (athletic and nonathletic), shoes and shoe laces, insoles for shoes, sneakers, sandals, boots, overshoes, slippers, steel-toed shoes, underwear, socks and stockings, hosiery, pantyhose, footlets, coats and jackets, rainwear, gloves and mittens for general use, hats and caps, ear muffs, belts and suspenders, neckties, scarves, aprons (household and shop), lab coats, athletic supporters, bathing suits and caps, beach capes and coats, costumes, baby receiving blankets, diapers (children and adult, including disposable diapers), rubber pants, garters and garter belts, girdles, formal wear, and wedding apparel."
The definitions of what constitutes footwear, school supplies, and school instructional materials are taken from the national Streamlined Sales and Use Tax Agreement. States like Ohio that are members of SSUTA and hold sales tax holidays are required to use the SSUTA definitions of what categories are eligible for their holiday, according to Lora Miller, director of governmental affairs and public relations at the Ohio Council of Retail Merchants.
Items purchased for a trade or a business are not eligible for tax-free purchase.
Other ineligible items include: clothing accessories or equipment, protective equipment, sewing equipment and supplies, sports or recreational equipment, belt buckles sold separately, costume masks sold separately, and patches and emblems sold separately.
School supplies are limited to the following: "binders, book bags, calculators, cellophane tape, blackboard chalk, compasses, composition books, crayons, erasers, folders (expandable, pocket, plastic, and manila), glue, paste, and paste sticks, highlighters, index cards, index card boxes, legal pads, lunch boxes, markers, notebooks, paper, loose-leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper, pencil boxes and other school supply boxes, pencil sharpeners, pencils, pens, protractors, rulers, scissors, and writing tablets."
Although the Ohio Council of Retail Merchants will try to quantify how much of an impact the tax holiday has on buying, the program is still a one-year experiment. "The Legislature would have to reauthorize it for it to happen in 2016," Gough said.