Ohio shoppers taking advantage of Labor Day sales may have noticed a slight change at the register-or maybe not.
State sales tax rose a quarter of a cent Sunday as part of the new state budget signed into effect June 30, but the change-from 5.5 percent to 5.75 percent-was small enough to go unnoticed by many shoppers.
"It's a fraction of a penny. It wouldn't be anything I noticed," said Marietta resident Sharon Morrison, 40, who was shopping with her family Monday.
JASMINE ROGERS The Marietta Times
Marietta resident Sharon Morrison and son Ryan check out at K-Mart Monday afternoon.
The sales tax increase is part of the state's tax reform budget. Signed by Gov. John Kasich June 30, the budget also aims to cut Ohioans' income taxes, starting with a retroactive 8.5 percent cut for the 2013 tax year, and increasing to an overall 9 percent cut in 2014 and a 10 percent cut in 2015.
Those tax cuts will make up for any extra pennies spent shopping, said Morrison.
"I'd rather pay a fraction of a cent now and get more back later," she said.
At a glance
$120 pair of leather boots
-Current 5.5 percent Ohio sales tax: $6.60
-New 5.75 percent Ohio sales tax: $6.90
$474 Apple iPad 4
-Current 5.5 percent Ohio sales tax: $26.07
-New 5.75 percent Ohio sales tax: $27.26
$30 pair of jeans
-Current 5.5 percent Ohio sales tax: $1.65
-New 5.75 percent Ohio sales tax: $1.73
According to 2010 census data, the median family income in Washington County is approximately $54,741. Assuming that family is a married couple with one child filing taxes jointly. they would save $68.77 on annual income taxes once the full 10 percent is phased in, according to The Ohio Department of Taxation.
Ohio employees should start feeling that change as early as their next paycheck, said Gary Gudmundson, Communications Director at The Ohio Department of Taxation.
"Withholding tax rates will decrease starting Sept. 1. You're going to get a little bit more money in your pay check," said Gudmundson.
Because the tax changes went into affect late in the year, the department is asking Ohio employers to immediately start using a withholding formula that reduced state withholding rates by 9 percent.
The tax cuts are projected to save Ohioans $2.7 billion in over three years, according to the Ohio Department of Taxation.
Store owners are not concerned that Sunday's sales tax increase will affect sales.
"A quarter of a cent isn't going to be a drastic change," said Rob Schafer, owner of Schafer Leather.
A average ticket item at the leather store, such a pair of western boots or a piece of luggage, costs around $120. A customer will not be paying an extra 30 cents in tax on that item.
Customers might be somewhat more likely to notice the change on big ticket items, noted shopper Becky Hartline, 61, of Whipple.
"I guess I haven't purchases anything big enough to notice it," said Hartline.
For example, the sales tax increase jumps from mere pennies to $25 for someone purchasing a $10,000 Gator Utility Vehicle at Bridgeport Equipment and Tools.
But even then people are not likely to give much thought to the change, speculated Bridgeport sales manager Brandon Neville.
"That $25 increase on a $10,000 purchase-people aren't going to notice it," he said.
Additionally, many of the stores big ticket farm equipment items are tax exempt for agriculture production use, said Neville.
In fact, there are some notable exceptions to Ohio sales tax, said Gudmundson. Housing, utilities, prescription drugs, and food not eaten inside a restaurant are not taxed.
Additionally, those purchasing a new vehicle can deduct the value of their trade-in from the taxable amount, he said.
While people might not notice the sales tax increase at first, it will add up over time, noted Marietta resident Mark Bartlett.
"Certainly we'll see a change, especially if you're a small business owner," said Bartlett, 61.
Tax breaks for small business owners are also written into Kasich's budget bill, reducing taxes by 50 percent on the first $250,000 of net earnings.
"I've talked with the accountant and they're not well versed on it yet. They don't know the ins and outs," said Schafer, adding, "Any reduction is going to help. But they always beat us up somewhere else."
The sales tax increase is the first since 2003 when the rate jumped from 5 percent to 6 percent for two years. In 2005 the rate was dropped to its previous 5.5 percent.
Customers making purchases in Washington County or those who purchase a vehicle elsewhere and title it in Washington County also pay an additional 1.5 percent in local sales taxes, said Washington County Auditor Bill McFarland.
The first on percent of local sales tax was adopted by the Washington County Commissioners in 1983 and the rate has remained static since that time. The tax goes into the county's general fund and was originally designated to be spent mainly for county bridges and county and township roads with only 15 percent to be put into use elsewhere.
"That's fluctuated quite a bit in the other direction, but the commissioners have discretion over how that is used," said McFarland.
The additional half percent was adopted by the voters in 1989 and supports the Washington County Sheriff's Office and county capital improvements and is often referred to as the sheriff's sales tax, he said.
In 2012, the county collected $7,427,000 on the one percent permissive sales tax and $3,713,500 on the sheriff's sales tax.
Changing the sales tax is an easy technical change for most business owners.
Schafer uses a Point of Sale (POS) computer system, into which he can easily input the new sales tax.
Same at Bridgeport Equipment and tools.
"We just flip a couple of switches," said Neville of the change.