COLUMBUS – A bill that would once again create a three-day sales tax holiday in August passed the Senate with overwhelming support.
READ MORE: In The Columbus Dispatch
Sen. Kevin Bacon (R-Minerva Park) wanted to make permanent the three-day sales tax break from 2015, but after conversations with some other senators and the Ohio Department of Taxation, he agreed to once again make it for one year.
“The proof was in the pudding with the results in 2015, and I think you’re going to see really good results again this year,” Bacon said, pointing to a study by the University of Cincinnati that estimates the state saw a net tax revenue gain of $4.7 million over the three days, thanks to purchases of taxed items and increased sales in border counties.
The tax-exempt period would cover Aug. 5-7.
Like last year, the bill would exempt from state and county sales tax articles of clothing priced up to $75 each and common school supplies and instructional materials up to $20 each.
“We expect next year’s sales tax holiday will be even greater for all Ohioans,” said Gordon Gough, president of the Ohio Council of Retail Merchants, a key backer of the bill.
According to the National Retail Federation, the average family with school-age children spent an estimated $669 on back-to-school supplies and clothing in 2014, or $470 without factoring in the cost of computers and electronics.
But Greg Lawson, of the conservative Buckeye Institute for Public Policy Solutions, said the sales tax holiday is an “attractive gimmick” that makes it harder to embrace broader, comprehensive tax reform.
“(It) appears to provide an economic boost but really just shifts the timing of purchases, not the aggregate amount of purchases over time,” he said. “Further, should surrounding states also embrace such holidays, any benefits will rapidly diminish.”
Hughes says Ohio was one of 18 states to host a sales tax holiday last year but no adjacent state held one last year, though Pennsylvania normally does not tax clothing.
The bill, which now goes to the House, passed 32-1 with Sen. Mike Skindell (D-Lakewood) the dissenting vote.