With the start of the 2024-2025 school year seemingly right around the corner, the Ohio Department of Taxation announced an expansion of the state’s annual sales tax holiday.
This year’s tax holiday will take place from midnight on July 30 and run through 11:59 p.m. on Aug. 8.
Compared to previous years, the 2024 holiday has been expanded from three to 10 days.
Not only will the tax exemption run longer, but compared to previous years, more items are eligible to be purchased and there are higher price limits on items that will not be taxed.
In the past, tax savings were limited on back-to-school related items, including clothes, that cost $75 or less. The holiday also covered school supplies and instructional materials with a value of $20 or less.
During this year’s holiday, the sales tax exemption will apply to all goods that are $500 or less except for watercraft, motor vehicles, alcoholic beverages, tobacco, vapor products, or any item that contains marijuana.
While there are fewer limitations on what can be purchased, the Ohio Department of Taxation urges shoppers to fully understand the rules in order to benefit from the sales tax exemption.
Here are some things to keep in mind:
- There is no limit on the amount of the total purchase. The qualification is determined item by item.
- 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 item at $800 and receives another item for free, the purchase would be subject to sales tax.
The exemption applies to items selling for $500 or less. If an item sells for more than $500, tax is due on the entire selling price.- Do not buy tax-exempt items with non-exempt items in the same transaction. If items that meet the exemption are sold with items that do not meet the exemption, then the entire price is subject to sales tax. If the price of the exempt and taxable items are separately stated, then the sales tax exemption can be applied to the exempt items.
- If a retailer offers a discount to reduce the price of an eligible item to $500 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. However, 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.
- Eligible items purchased during the sales tax holiday using a rain check qualify for the exemption only if the rain check is redeemed during the sales tax holiday. If it is redeemed after the holiday period, the purchase is taxable.
- Rebates occur after the sale and do not reduce the sales price of an item for purposes of the sales tax holiday threshold. If the price of the item before rebate exceeds the threshold, it is taxable.
- The exemption does not apply to taxable services, such as alterations performed on clothing, car repairs, or any similar services. If items that meet the exemption are sold in connection with services that do not meet the exemption for one non-itemized price, then the entire price is subject to sales tax. If the price of the exempt items and taxable services are separately stated, then the sales tax exemption can be applied to the exempt items.
- Qualifying items placed on or picked up from layaway during the sales tax holiday are exempt from sales tax.
- 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. However, if the order and payment were made before the sales tax holiday, even if the item was delivered during the sales tax holiday, it would not qualify for the exemption. Additionally, if an item is back ordered and payment does not occur until a later shipment, the item would not qualify for the exemption.
Initially introduced in 2019 to provide relief for families preparing for the back-to-school season, the sales tax holiday has become a highly anticipated event for many Ohio residents.
The Ohio sales tax holiday is a great opportunity for residents to save money on purchases for themselves and their families, and Zinner & Co. hopes the information provided here helps you maximize the benefits.
