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Sales Tax Holiday: What Does It Mean for Ohio?

Research suggests sales-tax free weekend boost business, but some analysts say they are not worth the hype. Credit Thinkretail/Flickr
Research suggests sales-tax free weekend boost business, but some analysts say they are not worth the hype. Credit Thinkretail/Flickr
August 3, 2015

COLUMBUS, Ohio - Expect some crowds at stores in Ohio this upcoming weekend. Friday through Sunday will be a one-time sales tax holiday to help ease the burden of back-to-school shopping. Ohio Tax Commissioner Joe Testa outlines what's included.

"This is sales tax exempt for items of clothing up to $75 per item, school supplies up to $20 per item and instructional materials up to $20 per item," says Testa. "There's no limit to how many items."

That means the purchase of several items up to $75 each will be sales tax exempt. It's the first time the state has held a sales tax holiday and Testa says the hope is to both boost sales and save Ohioans some cash.

Electronic items such as computers and tablets are not eligible for the tax exemption. But Michael Smith, assistant store sales manager with Best Buy in Mayfield, still expects the weekend to bring crowds.

"I'm sure it's going to drive a plethora of customers out into the marketplace for all different types of retailers," says Smith. "It's really going to help boost that economy."

Over a dozen other states have similar sales tax holidays in place, and there is debate over the benefits. Tax policy expert Cara Griffith, editor and chief with Tax Analysts, says there is some advantage for consumers, but after the spike in sales, retailers may see less spending.

"From an actual revenue standpoint, businesses might see more revenue; states are certainly going to take a revenue loss in terms of the taxes they would have received," says Griffith. "But at the end of the day the real benefit of these are they are incredibly politically popular because it sounds like you are doing a really good thing for consumers."

Research from the
University of Cincinnati Economics Center estimates an almost five percent boost in sales during a sales tax holiday, with average families saving about $38. But according to the Institute on Taxation and Economic Policy, sales tax holidays cost states about $300 million annually.

Mary Kuhlman, Public News Service - OH