CLEVELAND, Ohio – The sales-tax hiatus that Ohioans enjoy each year is being extended to restaurants for the first time.
The state’s sales tax holiday traditionally applies to retail stores, but this year restaurants will be included.
The tax hiatus runs midnight Tuesday, July 30, through 11:59 p.m. Thursday, Aug. 8.
Recent legislation added inclusion of dine-in food sales at restaurants as part of the tax break.
As cleveland.com’s Jeremy Pelzer reported, Cleveland shoppers will save $8 on every $100 they spend on eligible items, based on Ohio’s 5.75% sales tax rate and Cuyahoga County’s 2.25% sales rate.
Some limitations are in place.
Alcohol is not included. Total price of “buy one, get one free” or similar deals cannot be averaged to qualify both items.
Dining checks may not be split so that a portion is under $500 with the remainder charged separately.
According to the Ohio Department of Taxation: “Since food is taxable when it is ‘dine-in,’ any menu item that is less than $500 would qualify for the sales tax holiday exemption, except for alcohol (or any other non-qualified item). For example, a total check may be over $500, but if each menu item ordered is less than $500, then the entire check would be tax free.”
Discounts, coupons, loyalty programs and gift cards that reduce the price of an eligible item to $500 or less are allowed, according to Cleveland Independents, the consortium of more than 60 locally owned restaurants.
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Matt and Shirley Harper of Creekside Restaurant & Bar in Brecksville are on the fence about whether the sales-tax break will be a boon for their business.
“I don’t know if that’s going to make a decision for people to go out and dine,” Matt said. “But anything that saves consumers money I guess is a good thing. I just don’t know if it’s going to be a driving factor to go to restaurants like it might be for back-to-school clothes or something like that.”
Whether it attracts folks who normally don’t eat out often or whether regulars will go out more frequently remains to be seen.
“It could be all of those things,” Matt said. “We’re basically talking about 8 percent discount, depending on where you’re at. It might be ‘Hey, I’m going to save 8 percent, I’ll go out this week.’ I don’t know if it’s going to be a huge driver, but it might be something incremental.”
Summer is the busiest time of the year for Creekside, which the Harpers have owned for 32 years and which offers a scenic patio adjacent to greenery.
Shirley said they found out about the inclusion of restaurants in the tax holiday through Cleveland Independents, but the state has not officially notified them. Matt also said removing the tax on a bill is as simple as clicking to remove the tax button on Creekside’s point-of-sale system.
“We can take it on or off, so that’s not a problem for us,” he said. “But I can see, for a lot of smaller restaurants who don’t have a sophisticated POS system, trying to administer this might be a problem.”
Ohio’s summer sales-tax holiday has been around since 2015.
Related: Here’s when Ohio’s expanded tax holiday will start, and how much you can save
I cover restaurants, beer, wine and sports-related topics on our life and culture team. For my recent stories, here’s a cleveland.com directory. WTAM-1100’s Bill Wills and I talk food and drink around 8:20 a.m. Thursdays. Twitter and IG: @mbona30. My latest book, co-authored with Dan Murphy: “Joe Thomas: Not Your Average Joe” by Gray & Co.
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