May 30, 2014

Ohio Watchdog: Is Sales Tax Holiday Good or Bad for Ohio

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By Maggie Thurber, May 30, 2014

Ohio is once again considering an August sales tax holiday for schools supplies and equipment, but two tax groups think it’s a bad deal for taxpayers.

House Bill 450 would provide a three-day “holiday” each August. Sales and use taxes would not be charged on back-to-school clothing, school supplies, personal computers and personal computer supplies.

Matt Gardner, executive director of the Institute on Taxation and Economic Policy, says such thinking is noble but is poor tax policy.

“Anything that reduces the sales tax ought to be a step up in terms of making the taxation fair,” he said. “But holidays are an ineffective way of achieving that goal.”

Gardner said one of his biggest concerns with state tax policy is that it’s regressive and falls most heavily on low-income taxpayers.

“This is true for Ohio,” he said. “Low-income consumers spend more of their income on sales tax than upper-income consumers.”

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