Sales-tax holiday just for this year if bill passes

An Ohio bill would again let shoppers get a three-day break from the state’s sales tax — but just during this summer.

The Senate passed on Tuesday a bill proposed by state Sen. Kevin Bacon, R-Minerva that would create a tax-exempt period from Aug. 5 through Aug. 7. The bill had initially sought to make the sales tax holiday an annual occurrence.

The bill now go to the House for approval.

The state held its first-ever sales tax holiday last August to help back-to-school shoppers reduce the cost of clothing and school supplies. The holiday would apply to clothing items that cost $75 or less and to classroom supplies and instructional materials that cost $20 or less. Such items include book bags, textbooks, notebooks and pencils.

The sales tax holiday last August boosted sales tax revenues by $4.7 million while saving Ohio consumers $3.3 million in taxes, a study performed by the University of Cincinnati shows.

“We compared the actual retail sales data from August 2015 to what was forecast for that month and determined that sales were 6.48 percent higher than what our model predicted, indicating a gross increase of $8 million in sales tax collections,” UC Economics Center executive director Julie Heath testified recently in an Ohio Senate Ways and Means Committee meeting.

Opponents argue Ohio will lose valuable tax revenue when otherwise-taxable items are exempt from the sales tax.

But Heath said the collections were offset by $3.3 million in tax revenue not collected during the tax-free holiday, “leading to a net gain of $4.7 million of additional tax revenue to state and local government.”

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