Ohio Sales Tax Expanded Holiday Canceled
Ohio Reverts to Original Three-Day Sales Tax Holiday for 2026
After two years of expanded “tax-free weeks,” Ohio is returning to its traditional, shorter sales tax holiday format. For 2026, the event will take place over a single weekend in August (August 7 – August 9), focusing specifically on back-to-school essentials rather than the broad range of products seen recently.
Key Ohio Sales Tax Holiday Changes for 2026
Recent legislation, specifically House Bill 186, has redirected the state’s financial focus, resulting in a return to the original holiday structure.
- The 2026 Dates: The holiday is scheduled for Friday, August 7, through Sunday, August 9, 2026.
- Reduced Scope: Unlike the 2024 and 2025 holidays—which covered most items under $500—the 2026 exemption is limited to specific back-to-school categories.
- Lower Price Caps: The $500 threshold has been replaced by the original, much lower limits for clothing and school supplies.
Qualifying Items and Price Limits
To qualify for the tax exemption this year, individual items must fall below these price thresholds:
| Category | Price Limit | Examples |
|---|---|---|
| Clothing | $75 or less | Shirts, pants, shoes, coats, and baby diapers |
| School Supplies | $20 or less | Binders, backpacks, calculations, notebooks, and crayons |
| Instructional Material | $20 or less | Reference books, maps, globes, and workbooks |
Important Note: Items purchased for business use do not qualify for the exemption. Additionally, if an item exceeds the price limit (e.g., a $80 pair of shoes), the entire item is taxable; the exemption does not apply to the first $75.
Why the Change?
The shift back to a three-day holiday is a direct result of House Bill 186, signed in December 2025. This bill prioritizes long-term property tax relief for Ohio homeowners by establishing an “Inflation Cap Credit.”
To fund this property tax relief and ensure school districts aren’t financially penalized by the new caps, the state is transferring money from the Expanded Sales Tax Holiday Fund to a new School Revenue Temporary Offset Fund. Because these funds are being reallocated to lower property taxes, the surplus required to sustain a two-week, $500-limit sales tax holiday is no longer available for 2026.
Looking Ahead
While the 2026 holiday is more limited, the expanded format is not gone forever. State law allows for the longer, broader holiday to return in future years if the Expanded Sales Tax Holiday Fund reaches a sufficient surplus (typically $60 million) at the end of a fiscal year. For now, shoppers should plan their “back-to-school” trips for the first weekend of August to take advantage of the remaining exemptions.
Disclaimer: This article provides general information and should not be considered professional financial or tax advice. Please consult with a qualified CPA or financial advisor for guidance specific to your individual business needs.
Questions?
Kristin specializes in tax services, particularly for pass-through entities and complex individual matters. Her clients span industries like dealerships, real estate, wholesaling, and professional services. Her approach goes beyond compliance, addressing clients’ pain points with a genuine care that ensures understanding, compliance, and strategic insights.