Good News for Ohio Consumers – S.B. 243 enacted a one-time sales tax holiday to occur only in 2015. The holiday starts on Friday, August 7, 2015 at 12:01 a.m. and ends on Sunday, August 9, 2015 at 11:59 p.m. During the holiday, the following items are exempt from 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.
There is no limit on the amount of the total purchase. The qualification is determined item by item. Items used in a trade or business are not exempt under the sales tax holiday.
Impact on Ohio Businesses – FAQ’s
Q: Can a vendor choose not to participate in the sales tax holiday?
A: No. The sales tax holiday is set by law and vendors must comply.
Q: Does the $75 exemption apply to the first $75 of an item of clothing?
A: In other words, 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.
Q: Does the exemption apply to mail, telephone, E-mail, and internet orders?
A: Qualified items sold to consumers by mail, telephone, e-mail, or Internet shall qualify for the sales tax exemption if the consumer orders and pays for the item and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period.
Q: How do retailers report exempt sales?
A: If you sold clothing, school supplies, or computers qualifying as exempt items during the sales tax holiday, these exempt items must be reported on Ohio’s Sales and Use Tax Return. All sales for the period, including exempt sales, should be reported on Line 1, under Gross Sales of your sales tax return (form UST-1). Qualifying sales exempt during the holiday should be entered on Line 2 of your UST-1 and subtracted from gross sales along with any other exempt sales for the period.
Visit the Ohio Department of Taxation’s website for a complete listing of both consumer and business related sales tax holiday FAQ’s including the definitions of qualifying clothing, school supplies and school instructional materials.
Written by: Matthew Migal, CPA