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Ohio sales tax going up Sunday

COLUMBUS, Ohio (AP) — Shoppers across Ohio will see a one-quarter percent sales tax increase beginning Sunday, the first increase in the tax in a decade.
The rate will rise from 5.5 percent to 5.75 percent, or 25 cents for every $100 spent, on vehicles, electronics, clothing and other retail goods.
In Hardin County, the commissioners have added three separate one-half percent sales tax increases over the years, making the new sales tax rate here 7.25 percent effective Sunday.
The county’s first one-half percent addition was approved in October of 1985, and that was increased to 1 percent on March 1, 1990, according to Auditor Mike Bacon.
In October of 2004, the commissioners approved another one-half percent increase for five years and that was renewed in April of 2009. It will be up for renewal again in 2014, he said.
Ohio lawmakers approved the .25 percent increase as part of the state’s $62 billion, two-year state operating budget. The increase is part of a larger package of tax adjustments that will reduce overall business and individual taxes by an estimated $2.7 billion over the next three years. That includes a 10 percent cut to the personal income tax that will be phased in starting Sunday.
Policy Matters Ohio, a liberal think tank in Cleveland, has estimated that the income-tax cuts would result in the top 1 percent of Ohio wage earners on average receiving $6,000 a year while the bottom fifth of wage earners would have to pay $12 a year.
During budget debate this year, the group proposed that Ohio offer a sales-tax credit for lower income families as a targeted way to help offset some of the impact of tax changes on poorer Ohioans. Five states offer such credits.
Ohio Association of Second Harvest Foodbanks executive director Lisa Hamler-Fugitt, one of the state’s leading advocates for the poor, countered such arguments at an event Wednesday with praise for Republican Ohio Gov. John Kasich’s efforts toward helping the needy.
Besides his advocacy for Medicaid expansion, Hamler-Fugitt said the governor’s tax reform package helped lead to the creation of an earned-income tax credit that helps the low-income families targeted for help by her organization.
“Although the sales tax increase is increasing, the benefit of the EITC for those we serve is without question a net positive,” she said.
The Ohio Department of Taxation estimates that 35 percent of an average Ohio family’s spending is subject to the sales tax. Groceries, housing, medicines, education and many other purchases are exempt from sales taxes. Even with the latest change — Ohio’s first increase since 2003 — the state’s rate is still lower than about half the U.S. states.
Ohio first enacted a sales tax in 1935. The rate then was 3 percent. The rate rose to 4 percent in 1967 and to 5 percent in 1981, according to information from the state Tax Department.
In 2003, state lawmakers temporarily tacked a penny onto the tax — raising the rate to 6 percent for the next two years. In 2005, it was dropped to 5.5 percent.

From Associated Press
and Times staff reports

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Posted by on August 29, 2013. Filed under State News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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