Ohio’s Expanded Sales Tax Holiday Returns: What Businesses Need To Know for 2025

Ohio’s annual sales tax holiday is back and bigger than ever. Running from Aug. 1 through Aug. 14, 2025, the two-week exemption period once again offers consumers and businesses a rare opportunity to make tax-free purchases across a wide range of goods.

First expanded in 2024, the holiday continues in 2025 with generous qualifying guidelines and mandatory compliance for retailers.

Who’s Affected?

The 2025 sales tax holiday has far-reaching implications:

• Ohio consumers planning large purchases or purchases of general goods
• Ohio businesses looking to strategically time equipment and supply purchases
• Retailers licensed in Ohio, including out-of-state sellers with nexus

Note: Participation is not optional for Ohio retailers. Sellers holding an Ohio vendor’s license or seller’s use tax account must comply with the exemption rules.

When Does It Start and End?

The 2025 sales tax holiday begins at 12:00 a.m. ET on Aug. 1 and ends at 11:59 p.m. ET on Aug. 14.

What’s Exempt?

The exemption applies broadly to tangible personal property, including:

• Items sold separately and individually priced at $500 or less
• Meals at restaurants, for individual menu items priced at $500 or less (regardless of total bill)
• Rentals of qualifying property invoiced during the holiday, if $500 or less
• Business-to-business (B2B) purchases meeting the same price criteria

Examples of business purchases that qualify (if $500 or less per item) include:

• Office supplies and equipment
• IT hardware and prewritten software
  • Example: A business upgrading 100 monitors at $450 each could save sales tax on $45,000 worth of purchases.
• Cleaning, repair, and maintenance supplies
• Tools, materials, and rental equipment for contractors
• Practice supplies for medical, dental, and veterinary clinics
• Manufacturing maintenance items
• Promotional items, safety gear, and office furniture
• College textbooks (digital or physical)
• Magazine subscriptions billed during the period
• Withdrawn inventory used in taxable ways
• Otherwise gray areas where an existing sales tax exemption may currently be overextended

What’s Not Included?

Certain items remain taxable, even if they fall under the price threshold:

• Motor vehicles, outboard motors, and watercraft requiring title
• Alcoholic beverages
• Tobacco, vapor, or marijuana products
• Taxable services (e.g., repairs)

Retailer Compliance Considerations

Retailers – especially those with high transaction volumes – should prepare early to manage the technical and administrative challenges:

• System readiness: Update POS and invoicing systems to correctly apply the exemption, including shipping charges.
• Discount and rebate handling: Understand how coupons, rebates, and rainchecks interact with exemption rules.
• Post-holiday returns: Prepare policies for returns, exchanges, and refunds of tax-exempt purchases.
• Sales tax reporting: Accurately report exempt holiday sales on August returns.
• Direct-pay permit holders: Remember not to self-assess use tax during the holiday.

Need Help Navigating the Holiday?

Ohio’s Department of Taxation provides a comprehensive Sales Tax Holiday FAQ. For strategic tax planning, compliance support, or questions about this sales tax holiday might impact your business, contact your KSM advisor or fill out this form.