COLUMBUS – Ohio now has a permanent sales tax holiday for back-to-school purchases on the first Friday, Saturday, and Sunday of August each year. For 2019, the sales tax holiday will begin on Friday, August 2 at 12:00 a.m. and end on Sunday, August 4 at 11:59 p.m.
During the sales tax holiday, the following items are exempt from sales and use tax:
- Clothing priced at $75 per item or less;
- School supplies priced at $20 per item or less; and
- School instructional material priced at $20 per item or less.
Items used in a trade or business are not exempt under the sales tax holiday.
Here are some FAQ’s from the Ohio Department of Taxation:
A). Can multiple qualifying items be purchased in a single tax-exempt transaction?
For example, would the purchase of two shirts, two pair of pants, a pair of shoes and a jacket (each item costing $50, total purchase $300) be tax exempt? There is no limit on the amount of the total purchase. The qualification is determined item by item.
B). What items of clothing qualify?
“Clothing” is defined as all human wearing apparel suitable for general use. “Clothing” includes, but is not limited to, shirts; blouses; sweaters; pants; shorts; skirts; dresses; uniforms (athletic and nonathletic); shoes and shoe laces; insoles for shoes; sneakers; sandals; boots; overshoes; slippers; steel-toed shoes; underwear; socks and stockings; hosiery; pantyhose; footlets; coats and jackets; rainwear; gloves and mittens for general use; hats and caps; ear muffs; belts and suspenders; neckties; scarves; aprons (household and shop); lab coats; athletic supporters; bathing suits and caps; beach capes and coats; costumes; baby receiving blankets; diapers, children and adult, including disposable diapers; rubber pants; garters and garter belts; girdles; formal wear; and wedding apparel.
C). What is not included in the definition of clothing?
While clothing is eligible for the holiday, the following items are not eligible for the holiday and are subject to tax during the holiday period:
- Items purchased for use in a trade or business.
- Clothing accessories or equipment. Clothing accessories or equipment include: briefcases; cosmetics; hair notions, including, but not limited to, barrettes, hair bows, and hair nets; handbags; handkerchiefs; jewelry; sun glasses (non-prescription); umbrellas; wallets; watches; and wigs and hair pieces.
- Protective equipment. Protective equipment includes: breathing masks; clean room apparel and equipment; ear and hearing protectors; face shields; hard hats; helmets; paint or dust respirators; protective gloves; safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.
- Sewing equipment and supplies including, but not limited to, knitting needles, patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles; and sewing materials that become part of “clothing” including, but not limited to, buttons, fabric, lace, thread, yarn, and zippers.
- Sports or recreational equipment. Sport or recreational equipment includes ballet and tap shoes; cleated or spiked athletic shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins.
- Belt buckles sold separately.
- Costume masks sold separately.
- Patches and emblems sold separately.
D). Does the $75 exemption apply to the first $75 of an item of clothing?
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.
E).What types of items qualify as school supplies?
“School supplies” include only the following items: binders; book bags; calculators; cellophane tape; blackboard chalk; compasses; composition books; crayons; erasers; folders (expandable, pocket, plastic, and manila); glue, paste, and paste sticks; highlighters; index cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper; pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens; protractors; rulers; scissors; and writing tablets.
Items not included in this list are taxable. “School supplies” does not include any item purchased for use in a trade or business.
E). What types of items qualify as school instructional material?
“School instructional material” includes only the following items: reference books, reference maps and globes, textbooks, and workbooks.
Items not included in this list are taxable. “School instructional material” does not include any material purchased for use in a trade or business.
F). What about buy one, get one free or items sold for a reduced price?
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 clothing item at $80 and receives another item for free, the purchase would be subject to sales tax.
G). How are coupons and discounts handled?
If a retailer offers a discount to reduce the price of an eligible item to $20 (applies to school supplies) or less or $75 (applies to clothing) 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. 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.
H). Does the exemption apply to rain checks?
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.
I). Does the exemption apply to layaway sales?
Qualifying items placed on or picked up from layaway during the sales tax holiday are exempt from sales tax.
J). Does the exemption apply to mail, telephone, E-mail, and internet orders?
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 backordered and payment does not occur until a later shipment, the item would not qualify for the exemption.
K). How should retailers handle exchanges and returns?
L). Can a vendor choose not to participate in the sales tax holiday?
No. The sales tax holiday is set by law and vendors must comply.
M). If I purchase from a seller online at 1:00 a.m. on the designated Friday in August but the seller is located on the west coast in the Pacific Time Zone, should I be charged sales tax for those items eligible for the sales tax holiday?
Yes. The time zone of the seller’s location determines the authorized time period for the sales tax holiday when the purchaser is located in one time zone and the seller is located in another. In this instance, it is only 10:00 p.m. on Thursday in the Pacific Time Zone. The sales tax holiday does not start until 12:00 a.m. on the designated Friday in August.