Ohio’s Sales Tax Holiday is Friday, August 7, 2015 through Sunday, August 9, 2015! Are you ready?
Ohio will experience its first sales tax holiday this summer. The sales tax holiday exempts sales tax from items purchased during a limited time. The Ohio sales tax holiday focuses on back to school items to assist families in saving money on items they commonly purchased when students are going back to school.
• An item of clothing priced at $75 or less;
• An item of school supplies priced at $20 or less
• An item of school instructional material priced at $20 or less
*Items used in a trade or business are NOT exempt under the sales tax holiday. Therefore, if a business entity purchases office supplies (paper, writing utensils, etc.) they are to pay the sales tax.
Ohio Department of Taxation’s definition of clothing does not include accessories, sewing supplies, protective, sports or recreational equipment.
For school supplies, the Ohio Department of Taxation has a specific list. Only the items on the list are exempt.
School instructional materials only includes reference books, reference maps and globes, textbooks and workbooks according the Ohio Department of Taxation.
For a detailed list, go to the taxation website found here.
Retailers that use the leading software providers in their POS system will have the items coded automatically. Best practices would then be to perform a review of the mapping of products/skus to the software systems to ensure the outcome is as expected.
However, retailers that use a system created internally should do a more extensive review, then followed by testing to ensure the sales tax holiday weekend goes smoothly. Remember the customer is coming to purchase their children’s school and clothing items tax exempt. If they are at checkout and tax is applied, you may lose business or have some unhappy customers.
It is important that the employees at your locations are familiar with the list of exempt items. This will allow them to answer questions regarding the sales tax application on your products.
Preparing for your first sales tax holiday requires the tax team to analyze products and coding for your POS systems to have a smooth process during the weekend of the holiday.
Clarus partners has experienced personnel to assist you in preparing for Ohio’s first sales tax holiday. Have questions? Give us a call!