It was the Thursday before Thanksgiving, and I decided to get some holiday shopping in before the big Black Friday rush. Stopped at Easton, hoped to be in and out in less than an hour. How realistic is that? Anyway, as I’m crossing the street from Eddie Bauer into the Lego store I began adding up what I’d already spent, “I could really use one of those sales tax holidays right about now”. Wasn’t Ohio just floating that idea?
While the purpose of the sales tax holiday typically revolves around back-to-school shopping, how incredibly motivating would it be if it revolved around Christmas shopping? And on the biggest shopping day of the year? Incredibly unrealistic, I realize that. Many states obviously rely heavily on sales tax collections in November and December.
What if the entire month of January was a sales tax holiday? It would certainly have an effect on the holiday shopping hangover. Might it also send a small positive ripple into the economy? The benefits are endless.
Fortunately, as I checked out at the Lego store I realized, as an Ohioan, there is one huge sales tax holiday I completely forgot about…it’s called Buy Everything Online Day! Momentary celebration as I continue a month’s worth of cyber-shopping failing to consider the effect on my Ohio IT 1040.
The point is Ohio is already missing out on sales tax revenues that could and should be collected on many online sales. Who are we kidding, many states are missing out. The unfortunate fact is the number of people truthfully remitting use tax to the state for online purchases made this time of year is potentially staggering. How do you even begin to put an estimate on that tax revenue? One quick look at my Amazon account and my Ohio individual income tax refund all but disappears.
Considering the states who have hopped on board requiring online sales tax collection, it is somewhat surprising Ohio has chosen to sit this one out. By now we know, it certainly doesn’t make sense to wait for the United States Supreme Court to weigh in.
So where does the state go from here? Or has this become less of a focus during a time of slight economic recovery where states are seeing natural increases in tax revenues and are not so desperate to enforce existing sales and use tax laws? And if we are recovering, maybe a month of sales tax freedom wouldn’t be so effective after all.