Ohio Extends 2024 Sales Tax Holiday

Ohio Governor Mike DeWine announced an extension for the state’s 2024 sales tax holiday, which will take place from 12 a.m. on Tuesday, July 30th, through 11:59 p.m. on Thursday, August 8th.

What is the Ohio Sales Tax Holiday?

Historically, the state of Ohio sets aside three days for consumers to buy certain items without sales tax. This year, the Ohio tax holiday timeline has been extended to 10 days. This sales tax holiday is intended to help families buy clothing, supplies, and other items children may need for the upcoming school year.

The sales tax holiday allows tax-free purchases made in-person or online.

In the past, the sales tax holiday had restrictions on eligible items and capped the maximum dollar amounts for individual items. However, Ohio’s latest budget legislation, House Bill 33, has broadened qualifying items, limitations, and dates for the 2024 tax holiday.

Qualifying Purchases

During the 2024 sales tax holiday, qualifying items must be tangible personal property priced at $500 or less. There’s no restriction on the total purchase amount, as eligibility is individually assessed item by item. Sales of dine-in food at restaurants are included. However, taxable services, titled watercraft, motor vehicles, alcoholic beverages, tobacco, vapor products, and items containing marijuana are excluded.

Here are additional considerations:

1. Items exceeding $500 are fully taxable. Retailers cannot apply the exemption to only the first $500 of an item’s price and tax the remainder.
2. Retailers cannot separate items that are normally sold together to meet the sales price threshold.
3. “Buy one, get one free,” “Buy one, get one 50% off,” or similar offers cannot average the price of items to qualify.
4. Applying discounts, coupons, loyalty programs, memberships, and money-saving deals with the intent to lower a qualifying item’s price to an amount less than $500 is not permitted.
5. Manufacturer’s coupons, rebates, or similar discounts that support third-party reimbursement cannot be used with the intent to reduce an item’s price to qualify for the sales tax holiday.

Sales Tax Reporting and Other Considerations

While the sales tax holiday is seamless for consumers who choose to shop during this timeframe, retailers must be mindful of sales tax charges, reporting, and other considerations to comply with state obligations. Here are some critical points retailers should be aware of:

• Retailers are mandated to comply with the sales tax holiday. Retailers should verify that their point-of-sale software can accurately apply the exemption during the holiday period.

• If a consumer pays sales tax on a qualifying item during the holiday, the retailer is obligated to refund the tax amount to the consumer.

• When filing sales tax returns for July and August 2024, retailers should record all sales made during the tax holiday period on the gross sales line. Qualifying holiday sales should be separately noted on the exempt sales line (Line 2) of the sales tax returns.

Visit the Ohio Department of Taxation website for more details, or if you’re a business with questions about tax exemptions related to this holiday, contact Buckingham’s state and local tax attorneys.