Attention, shoppers: Sales tax holiday runs through Sunday
Ohio has a sales tax holiday today through 11:59 p.m. Sunday, but consumers will need to follow several ins and outs to the rules.
During the holiday, the following items are exempt from the state sales and use tax:
* An item of clothing priced at $75 or less;
* An item of school supplies priced at $20 or less; and
* An item of school instructional material priced at $20 or less.
Because we’re talking about tax, and government, it’s not quite that simple.
For example, would the purchase of two shirts, two pairs of pants, a pair of shoes and a jacket (each item costing $50, total purchase $300) be tax exempt? There is no limit on the amount of the total purchase. The qualification is determined item by item.
“The back-to-school season is very important to retailers, second only to the holiday season in terms of sales. Ohio’s Sales Tax Holiday, while it’s primarily designed to help parents afford more clothing and supplies for their children, is equally beneficial to the retail industry,” said Joe Bell, spokesman for Eastwood Mall owner / operator Cafaro Company.
“The National Retail Federation estimates that parents and students will spend more than $37 billion nationwide this year on school needs, much more than last year,” Bell said.
While clothing is eligible for the holiday, the following items are not eligible for the holiday and are subject to tax:
* Items purchased for use in a trade or business;
* Clothing accessories or equipment, such as briefcases; cosmetics; hair notions, including barrettes, hair bows and hair nets; handbags; handkerchiefs; jewelry; sunglasses (non-prescription); umbrellas; wallets; watches; and wigs and hairpieces;
* Protective equipment such as breathing masks; clean room apparel and equipment; ear and hearing protectors; face shields; hard hats; helmets; paint or dust respirators; protective gloves; safety glasses and goggles; safety belts; tool belts; and welders gloves and masks;
* Sewing equipment and supplies including, but not limited to, knitting needles, patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles; and sewing materials that become part of “clothing” including, but not limited to, buttons, fabric, lace, thread, yarn and zippers;
* Sports or recreational equipment. This includes ballet and tap shoes; cleated or spiked athletic shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey and golf; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins.
Get out your calculator now.
If the selling price of an item of clothing is $80, is the first $75 exempt from sales tax? No. The exemption applies to items selling for $75 or less. If an item of clothing sells for more than $75, tax is due on the entire selling price.
“Clothing” is defined as all human wearing apparel suitable for general use. “Clothing” includes 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.
For the kids, “school supplies” include only the following items: 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.
A retailer may not split items that are normally sold together in order to fall under the sales-price threshold.
The total price of items advertised as “buy one, get one free” or “buy one for a reduced price” cannot be averaged to qualify both items for the exemption. The exemption depends on the actual price paid for each item. For example, if a consumer buys one clothing item at $80 and receives another item for free, the purchase is subject to sales tax.
If a retailer offers a discount to reduce the price of an eligible item to $20 (applies to school supplies) or less, or $75 (applies to clothing) or less, the item will qualify for the exemption. This applies to all discounts even if a retailer’s coupon or loyalty card is required to secure the discount. If a retailer accepts a coupon that entitles the retailer to third-party reimbursement, such as a manufacturer’s coupon, the discount provided by the coupon does not reduce the item’s sales price for purposes of determining whether the item is eligible for the exemption.
For additional details, go to the Ohio Department of Taxation’s website at https://tax.ohio.gov/wps/portal/gov/tax/help-center/faqs/sales-and-use-tax-sales-tax-holiday/sales%20and-use-tax-sales-tax-holiday