To the extent you are shopping at businesses with point-of-sale software, the businesses will automatically refrain from collecting sales tax during the appropriate period, both on in-person and online purchases. However, it is important to always check your receipts during this time to confirm!

What is the purpose of a sales tax holiday?

Many states that impose sales taxes offer sales tax holidays to stimulate consumer spending and provide financial relief to taxpayers from paying sales taxes on eligible purchases. Some states, such as Ohio, like to hold their sales tax holidays in August when consumers are doing their back-to-school shopping.

What types of purchases are tax-exempt during a sales tax holiday?

It is important to note that not all purchases are tax-exempt during Ohio’s sales tax holiday. Eligible purchases include purchases of almost all tangible personal property priced at $500 or less. Some examples of tax-exempt products under Ohio law include: (1) electronics; (2) clothing; (3) books; (4) home goods; (5) plants; (6) sporting goods; and (7) food and beverages. However, please note that this is not an exclusive list, and many other products may qualify as eligible products unless they are included in the list of excluded products below.

What types of purchases are NOT tax-exempt during a sales tax holiday?

Purchases of the following are not tax-exempt during the annual Ohio sales tax holiday: (1) watercraft or outboard motors; (2) motor vehicles; (3) alcoholic beverages; (4) tobacco products; (5) vapor products (i.e., vapes); and (6) products containing marijuana.

For more information or to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422. 

*Please note that Christine Townsend is licensed only in Massachusetts.

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During the Holiday, Ohio suspends the collection of sales tax on sales of certain tangible property during the Holiday. Eligible property available for a sales tax exemption under the Holiday includes tangible personal property. The Holiday excludes, however, sales of watercraft motors, vehicles, alcohol, tobacco, vapes, and marijuana. Consumers are exempt from paying both sales and use tax during the Holiday if an item’s price is less than $500. For example, if a consumer purchases multiple items, each item is viewed as to the $500 limit. This means the total sale may be greater than $500, but because each individual item purchased was less than $500, no sales tax should be applied to those respective purchases—even on out-of-state.

All Ohio vendors doing business in Ohio participate in the Holiday. As such, consumers should not pay sales tax during that Week on eligible tangible personal property. Historically, Ohio used the Holiday for “back-to-school” programs. This year Ohio has expanded the Holiday timeline, increased the number of products available, and increased the exempt spending threshold.

While the Holiday is beneficial for consumers, businesses have compliance obligations during the Holiday. Businesses have a reporting obligation to report sales during the Week as exempt for Ohio tax purposes. And businesses may not take action to push items below the $500 threshold. While businesses may honor coupons and provide rebates during the Week, businesses may not push otherwise disqualified sales below the $500 threshold.

While the Week was extended this year, consumers may make exchanges and returns with businesses during the Week. Overall, only transactions occurring within the Week qualify for the Holiday; and transactions outside the Week are still subject to normal sales tax rules.

Consulting with an experienced tax attorney will assist businesses with compliance during the Holiday.

If you have questions related to this year’s sales tax holiday, have questions about tax compliance, or if you would like to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422.

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