A University of Cincinnati Economics Center study estimates that Ohio's sales tax holiday could increase retail sales volumes by 4.8 percent in August and "inject $78 million dollars into Ohio households."
CLEVELAND, Ohio - With weeks to go before students start class, Ohio parents and consumers are already in the mood for back-to-school shopping, eager to take advantage of Ohio's first-ever sales tax holiday on clothing, shoes and school supplies from Aug. 7 through 9.
With families of kindergarten through 12th-grade students expected to spend an average of $630.36, and families of college students expected to spend an average of $899.18, according to the National Retail Federation, "Ohio's tax-free holiday promises great savings for consumers," said Gordon Gough, president and chief executive of the Ohio Council of Retail Merchants, in a statement.
That includes an average of $97.74 on school supplies such as notebooks, backpacks and pencils.
Even though the discounts aren't as high as what some retailers might offer in their back-to-school promotions, sales tax holidays are still popular with consumers in a "stick-it-to-the-man kind of way," he said.
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Gordon Gough, president and CEO of the Ohio Council of Retail Merchants The retail merchants' council has also heard from local PTA groups planning to encourage bulk purchases for their students and school districts.
"Saving money is huge for parents," said Sheila Ragland, president of the Ohio PTA, via email. "This savings on tax could allow parents to purchase more necessary items now instead of further on down the road."
"Parents should be engaged in shopping for their children or school. Hopefully, by saving money, it will make it a positive experience both for the parent and child," she said.
The Ohio PTA shared news of the tax holiday on its Facebook page, sent out tweets via @OhioPTA and other social media, and mentioned it on board briefs sent to school district advisers throughout Ohio.
A 2013 University of Cincinnati Economics Center study on the potential impact of the Ohio sales tax holiday estimated that it could increase retail sales volumes by 4.8 percent in August and "inject $78 million dollars into Ohio households."
When Florida held a similar tax holiday, 80 percent to 100 percent of the benefits of the event went to consumers, who saved money on their back-to-school shopping in addition to purchases for others in the household.
But even though families are saving money, the loss in state sales tax revenue for the month is statistically insignificant, because consumers also buy more taxable items along with their eligible purchases.
Ohio's sales tax holiday is also expected to spur buying by out-of-state shoppers, because none of the other states bordering Ohio has a similar program for back-to-school shopping (although Pennsylvania does not tax clothing sales).
The tax holiday, created by legislation passed last year, exempts consumer purchases from state and local sales tax during the three-day holiday, from 12:01 a.m. Friday, Aug. 7, through 11:59 p.m., Sunday, Aug. 9.
"Our members are already hearing good things about the holiday from their customers and friends," said. "There's a lot of anticipation building among consumers for the upcoming Aug. 7 through 9 weekend."
"Eligible items include everything from shirts and shoes to lab coats, belts and socks to disposable diapers," as long as individual items are priced at $75 or less.
"Plus, the back-to-school exemption covers pens, paper, schoolbooks and workbooks" priced at up to $20 each, he said.
Eligible items bought in store are tax-free to all consumers, including residents who may have driven in from neighboring states.
But online purchases are tax-free only to Ohio residents.
Shoppers can buy as much as they want of eligible items, as long as the retail price for each item is within the allowable limit.
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 for footwear, school supplies, and school instructional materials are taken from the national Streamlined Sales and Use Tax Agreement. States like Ohio that 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 tax-free.
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 defined as: "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."