COLUMBUS -- State lawmakers finalized legislation May 24 setting a third annual back-to-school sales tax holiday over the first weekend in August.
SB 9 passed the House on a vote of 92-1, and the Senate later concurred on amendments -- namely the addition of an emergency clause to ensure the legislation takes effect as soon as Gov. John Kasich adds his signature.
The legislation calls for sales tax breaks on clothing and other specified purchases made on Aug. 4, 5 and 6 of this year. It would exempt sales taxes on clothing items priced up to $75 each and school supplies and instructional materials up to $20 each, whether purchased in brick-and-mortar stores or through online retailers.
The exemption would not cover computers and other electronics, sports equipment and hair accessories or higher-priced clothing and supplies.
About 17 other states have comparable sales tax holidays in place, most with limits similar to Ohio's. Ohio has offered the sales tax holiday the past two years.
Opponents of sales tax holidays often focus on the resulting lost revenues, saying reduced sales tax collections negatively affect state services.
The new legislation comes during deliberations on the biennial state budget, as lawmakers tackle an anticipated $800 million decrease in spending levels proposed in the initial version offered by the governor.
And a fiscal analysis by the state's Legislative Service Commission noted that SB 9 could cost state and local coffers and transit authorities nearly $19 million in sales taxes that would otherwise have been collected.
Rep. John Patterson (D-Jefferson) attempted an amendment from the floor that would have held local governments harmless for revenues lost due to the holiday, but the language was tabled on a split vote.
Backers say the sales tax holiday would increase sales at local businesses. An updated study by the University of Cincinnati's Economics Center attributed $34 million in sales to last year's holiday, saving consumers about $2.4 million in taxes as a result.
" This sales tax holiday has become very popular with our constituents," said Rep. Tim Schaffer (R-Lancaster). " The 2015 sales tax holiday, the first one we did, when it was brand new, generated over $4.7 million in additional sales tax revenue for the state of Ohio. That's because of the secondary things that people throw in their carts when they go to buy the normal, customary back-to-school items."
He added, "The local governments, libraries and other taxing authorities that utilize the sales tax at the local level will see and have seen an increase in consumer activity [and], just like the state of Ohio, increased sales tax collections ..."
The House added the emergency clause during its deliberations, a move made necessary because of the timing of Wednesday's floor vote. Absent the language, the bill would not take effect until 90 days after the governor adds his signature, weeks after the scheduled holiday.
Marc Kovac covers the Ohio Statehouse for Gatehouse Media. Contact him at email@example.com or on Twitter at OhioCapitalBlog.