Loveland, Ohio –Ā – The 2024 expanded Sales Tax Holiday will take place from 12:00 a.m. Tuesday, July 30 until 11:59 p.m. Thursday, August 8.
In conjunction with the Ohio General Assembly, Governor DeWine expanded the length of Ohioās Sales Tax holiday to 10 days and will allow tax-free purchases made in-person or online on all eligible items of up to $500.
āOhioās sales tax holiday, historically, has been meant to help families buy clothing and school supplies for the upcoming school year,ā said Governor DeWine. āThis expanded sales tax break will help Ohioās families with back-to-school necessities as well as other substantial purchases during a time when so many household budgets are being strained.ā
Previous sales tax holidays ran three days, included only school-related items, and offered much lower purchase price limits ($75 maximum on an item of clothing; $20 per item of instructional material and/or school supplies).
Ohio’s sales tax holiday allows tax-free purchases made in-person or online. It does not include an exemption from sales tax for services or any purchase of watercraft, outboard motors, motor vehicles, alcoholic beverage, tobacco, vapor products, or any item that contains marijuana.
Q&A From Ohio Department of Taxation
Starting in 2024, Am. Sub. H.B. 33 provides for a sales tax holiday of at least three days that includes the first Friday, Saturday, and Sunday of August each year if a budget surplus exists.Ā For 2024, Ohioās sales tax holiday is fromĀ 12:00 a.m. Tuesday, July 30 until 11:59 p.m. Thursday, August 8. See also FAQ 25.
The sales tax holiday will include all tangible personal property that is $500 or less except watercraft or outboard motor required to be titled pursuant to Chapter 1548. of the Revised Code, a motor vehicle, an alcoholic beverage, tobacco, a vapor product, or an item that contains marijuana.
The sales tax holiday will not include tangible personal property that is over $500 and those services that are identified in R.C. 5739.01(B)(3).Ā Watercraft or outboard motor required to be titled pursuant to Chapter 1548. of the Revised Code, a motor vehicle, an alcoholic beverage, tobacco, a vapor product as defined in R.C. 5743.01, or an item that contains marijuana as defined in section R.C. 3796.01 are also not included in the sales tax holiday.
For example, would the purchase of two shirts, two pair of pants, a pair of shoes and a jacket (each item costing $100, total purchase $600) be tax exempt? There is no limit on the amount of the total purchase. The qualification is determined item by item.
In other words, if the selling price of an item is $600, is the first $500 exempt from sales tax?Ā No. The exemption applies to items selling for $500 or less. If an item sells for more than $500, tax is due on the entire selling price.
No. Ā A retailerĀ may not split items that are normally sold together in order to fall under the sales price threshold.
The total price of items advertised as ābuy one, get one freeā or ābuy one for a reduced priceā cannot be averaged to qualify both items for the exemption. The exemption depends on the actual price paid for each item.Ā For example, if a consumer buys one item at $800 and receives another item for free, the purchase would be subject to sales tax.
Articles normally sold as a unit must be sold that way during the sales tax holiday. They cannot be priced separately and sold as individual items to qualify for the exemption. However, components normally priced as āseparatesā may still be sold as separate articles.
If items that meet the exemption are sold with items that do not meet the exemption, for one non-itemized price, then the entire price is subject to sales tax.Ā If the price of the exempt and taxable items are separately stated, then the sales tax exemption can be applied to the exempt items.
If a retailer offers a discount to reduce the price of an eligible item to $500 or less, the item will qualify for the exemption. This applies to all discounts even if a retailerās 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 manufacturerās coupon, the discount provided by the coupon does not reduce the itemās sales price for purposes of determining whether the item is eligible for the exemption.
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.
Rebates occur after the sale and do not reduce the sales price of an item for purposes of the sales tax holiday threshold.Ā If the price of the item before rebate exceeds the threshold, it is taxable.
The exemption does not apply to taxable services, such as alterations performed on clothing, car repairs, or any similar services. If items that meet the exemption are sold in connection with services that do not meet the exemption for one non-itemized price, then the entire price is subject to sales tax.Ā If the price of the exempt items and taxable services are separately stated, then the sales tax exemption can be applied to the exempt items.
Qualifying items placed on or picked up from layaway during the sales tax holiday are exempt from sales tax.
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.Ā 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.Ā Additionally, if an item is backordered and payment does not occur until a later shipment, the item would not qualify for the exemption.
If all items in a shipment qualify as eligible items and the sales price for each is within the sales tax holiday price threshold, the shipping and handling charges areĀ notĀ taxable.
If the shipment includes exempt items and taxable items, the seller should allocate the shipping and handling charges by a percentage based on the total price of the taxable items to the total price of all the items in the shipment.Ā The retailer must charge tax on the portion of the shipping and handling charges allocated to the taxable items in the shipment.
- If a consumer buys an eligible item during the sales tax holiday and later exchanges it for the same item, the retailer should not charge sales tax even if the exchange is made after the end of the sales tax holiday.
- If a consumer buys an eligible item during the sales tax holiday and returns the item afterĀ the tax holiday period for credit on the purchase of a different item, the retailer must charge sales tax on the sale of the newly purchased item, even if it would have been eligible for the exemption during the sales tax holiday.
- If a consumer buys an eligible item before the holiday period but returns the item during the sales tax holiday period and receives credit on the purchase of a different item of eligible property, no sales tax is due on the sale of the new item.Ā The retailer must provide the consumer credit for both the purchase price and sales tax paid on the item being returned.
Retailers should refund tax to any consumer who was charged sales tax on an exempt item during the sales tax holiday. Consumers who were charged tax by a retailer should take their receipt to the retailer for a refund.
Those items of tangible personal property that qualify for the exemption during the sales tax holiday, must be reported on Ohioās Sales and Use Tax Return (form UST-1). All sales for the period, including exempt sales, should be reported on Line 1, under Gross Sales on your sales tax return (form UST-1). Qualifying exempt sales during the holiday should be entered on Line 2 of your UST-1 and subtracted from gross sales along with any other exempt sales for the period.
No.Ā Am.Sub. H.B. 33 does not provide for reimbursement for any costs associated with making the necessary adjustments to point of sale equipment.
No. The sales tax holiday is set by law and vendors must comply.
The Department will not endorse or approve any particular advertisement. However, there is no restriction on advertising for the sales tax holiday.
No, if your purchase would have been exempt from sales tax during the sales tax holiday, it is exempt from use tax.Ā Please see the timing restrictions on Internet sales provided for in FAQ 25.
Yes.Ā The time zone of the sellerās 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.Ā In this instance, it is only 10:00 p.m. on Monday in the Pacific Time Zone.Ā The sales tax holiday does not start until 12:00 a.m. on the designated Tuesday.
A periodic payment is a transaction where an item is purchased but payments are made at regular intervals, such as weekly, monthly, or yearly. For example, rent-to-own purchases. Does the sales tax holiday apply to any periodic payments that may fall within the holiday and are under the $500 threshold?
No, under Ohio law the full amount of sales tax is due at the time of purchase, even if the tax is then paid through monthly installment payments. This means that, even if the periodic payment is under $500, the sales tax holiday would not reduce the tax due for that payment.
If you purchase a qualifying item during the holiday that is over $500 and subject to periodic payments, the exemption will not apply because the purchase price is over the sales tax holiday threshold. Likewise, if you purchase a qualifying item during the holiday that is under $500 and subject to payments, the item will be subject to the holiday exemption.
Subscription boxes are a service in which customers pay to receive regular deliveries of products. If you have a subscription box that you pay for monthly that is a qualifying item under the $500 sales tax threshold and you initially purchased the subscription before the holiday, the monthly payment that falls during the sales tax holiday would be exempt, as subscription boxes are month to month payments on specific, new, tangible personal property.
Yes. Previously the sales tax holiday did not include business-to-business sales, and they were not eligible for the exemption. The new holiday includes these sales. Any sale under $500 is included in the sales tax holiday if it isnāt for watercraft or outboard motors that must be titled, motor vehicles, alcoholic beverages, or tobacco, vapor, or marijuana products.
Generally, the rental of tangible personal property like equipment or motor vehicles is subject to tax. Motor vehicles are not subject to new the new holiday, and their rental will continue to be taxable.
However, the sales tax holiday does apply to all other rented equipment. If the product is under $500, the rental agreement begins during the tax holiday period, and the rented equipment isnāt watercraft and outboard motors that must be titled, the sales tax holiday would apply. Examples of eligible equipment are tools, scaffolding, lawn and landscaping equipment, materials handling equipment, or similar products. See also FAQ #26 & #27 for more details on subscriptions and periodic payments.
Under Ohio law, food is taxable if it is consumed on the premises where it is sold. Most commonly, this applies when you are ādining-inā at a restaurant. Since food is taxable when it is ādine-in,ā any menu item that is less than $500 would qualify for the sales tax holiday exemption, except for alcohol (or any other non-qualified item).
For example, a total check may be over $500, but if each menu item ordered is less than $500, then the entire check would be tax free. Again, this excludes alcohol, as it does not fall under the holiday and tax must always be collected on its sale.
