COLUMBUS, Ohio – If a central Ohio lawmaker has his way, Ohio would join 18 other states that offer shoppers holidays from their states’ sales taxes.
Sen. Kevin Bacon (R–Minerva Park), chair of the Senate Commerce and Labor Committee, is introducing legislation that would suspend or reduce state and local sales taxes on school supplies, clothing, and electronics on the first Friday and Saturday in August, he announced at a news conference Tuesday morning.
Ohio does not currently offer a sales tax holiday, thought it was one of the first states to pioneer the concept in the early 1970’s.
Supporters of sales tax holidays say they spur traffic in brick-and-mortar retail stores, but critics claim they do not increase sales overall and deprive the state of badly needed tax revenue.
Bacon cited research by the Economics Center at the University of Cincinnati in claiming that many of the sales tax holidays in 2012 applied to back-to-school items and estimated that a holiday would boost retail sales by approximately 4.8% during the month of August.
Families would save approximately $78 million from a sales tax holiday, Bacon said.
Bacon’s proposal would apply to pencils, pens, binders and lunch boxes priced $20 or less; clothing, such as denim, sweaters, and jackets priced $100 or less, and electronic book readers, laptops, and desktop computers priced $750 or less.
Proponents of sales tax holidays say, while shoppers come to stores to buy the items enjoying the tax break, that also spend money on items to which the sales tax still applies, helping to make up for the loss of revenue the holiday may cause.