Below is a transcript of testimony offered before the Ohio Senate Ways and Means Committee on Tuesday, February 23, 2016 in support of Senate Bill 264 (To provide for a permanent three-day sales tax “holiday” each August during which sales of back-to-school clothing and school supplies are exempt from sales and use taxes.)
SENATE BILL 264 – SALES TAX HOLIDAY-BACK-TO-SCHOOL SHOPPING-PERMANENT – PROPONENT TESTIMONY
OHIO SENATE WAYS AND MEANS COMMITTEE
February 23, 2016
Chairman Peterson, Vice Chair Beagle, Ranking Member Tavares,
and members of the Senate Ways and Means Committee, thank you for the
opportunity to provide proponent testimony on Senate Bill 264 (SB 264). My name
is Jared Weiser and I serve on the staff of the National Federation of
Independent Business/Ohio (NFIB/Ohio). I
appear before you today on behalf of our nearly 25,000 governing members to
express our support for SB 264, which makes permanent a three-day sales tax
holiday each August for back-to-school items such as clothing, school supplies
and instructional materials. During this
period, these items will be exempt from Ohio sales and use tax.
By way of background, NFIB’s typical member employs 25 or
fewer employees and does under $1 million in gross receipts on an annual basis.
A significant percentage of our 25,000 Ohio
governing members are in the retail sector and I will focus my testimony on
By all accounts, the one-time sales tax holiday in 2015 was
a resounding success… not just for the “big box” retailers, but it was equally
successful for the small retailers on “Main Street” Ohio. This sentiment was echoed by the
sophisticated and thoughtful study conducted by the University of Cincinnati
(UC) that was presented to this committee last week. According to the study, the sales tax holiday
created a net gain for the State of Ohio in the amount of $4.7 million. We also must acknowledge that other purchases
made during the holiday that were not exempted under the law, contributing to
this amount. These purchases may not
have occurred if families were not out shopping in Ohio due to the sales tax
holiday, instead spending money out of state or on-line. The holiday was an important win for all
parties. The state increased tax
revenue, retailers saw increased traffic and sales, and most importantly,
hardworking Ohioans retained more money in their pockets. This study clearly shows that the Ohio sales
tax holiday works.
Another illustration of the sales tax holiday’s success was the impact in Ohio’s border communities. According to the UC study, border counties in Ohio recognized a 15.48% increase in sales tax collections during last year’s holiday. There is currently no bordering state to Ohio that has adopted a sales-tax holiday. Making the sales tax holiday permanent in Ohio will allow us to maintain the momentum from 2015 and add one more competitive economic advantage for Ohio.
Finally, please remember who this legislation is really helping – working families and their school age children – not retailers or the state. We applaud Senator Bacon for seeking to make this one-year pilot permanent. Small business owners and consumers need and desire predictability.
Thank you for the opportunity to provide this testimony and I am happy to answer questions you may have at this time.