COLUMBUS, Ohio—Ohio’s newly expanded sales tax holiday, during which almost anything costing $500 or less will be tax-free, will run from July 30 through Aug. 8 this year, according to Gov. Mike DeWine’s office.
The 10-day, $741 million sales tax holiday will be a dramatic expansion from past Ohio summer sales tax holidays – both in terms of its length and the extensive number of products it applies to. And it could be the first in a number of such tax hiatuses.
During those 10 days, Ohio customers will not pay any state or local sales tax on any item priced at $500 or less. There’s a short list of exceptions, including vehicles, watercraft, outboard motors, alcohol, tobacco products or vaping items, or medical marijuana.
Given the state’s 5.75% sales tax rate, and Cuyahoga County’s 2.25% sales rate, that means Cleveland shoppers will save $8 on every $100 they spend on eligible items.
Ohio has had a summer sales tax holiday since 2015 centered only around purchases for the upcoming school year, such as clothes and school supplies. But state lawmakers dramatically expanded it in last year’s state budget, from about $20 million per year in the past to $741 million this year.
“This expanded sales tax break will help Ohio’s families with back-to-school necessities as well as other substantial purchases during a time when so many household budgets are being strained,” DeWine said in a statement.
However, economists on both the left and right say sales-tax holidays, in general, are little more than a political gimmick, and that the three-quarters of a billion dollars in tax savings won’t do much to help retailers, poorer Ohioans, or the state’s economy.
The budget originally specified that the 2024 sales-tax holiday would last 14 days, but DeWine vetoed that language because it was unclear how much money a two-week holiday would cost the state. Instead, the sales-tax holiday was calculated the other way around, with the DeWine administration and local officials put in charge of estimating how many days this year’s holiday could run until the total cost hit $750 million.
Under the budget, Ohio will continue to hold similar expanded sales-tax holidays of three days or more in 2025 and beyond, but only in years when the state ends the previous fiscal year with at least $60 million in unanticipated revenue. In years when that’s the case, state and local officials will calculate exactly how many days that year’s tax holiday will last, based on how much money is available.
The state will reimburse local governments for local sales tax revenue lost from the holiday, both this year and in future years with tax holidays.
Jeremy Pelzer covers state politics and policy for Cleveland.com and The Plain Dealer.
Source: Here’s when Ohio’s expanded tax holiday will start, and how much you can save
