Most schools start later this month and the average family will spend hundreds of dollars getting ready. This weekend is Ohio’s tax-free event for back-to-school shopping but On Your Side Investigators looked into whether the tax holiday really saves you money.
"Whatever they need, I'm there for them,” said Arcia Smith as she loaded up her car. She is getting her kids ready for back to school and that means big-time shopping. "You need 5 shirts a piece. So, I got 10 pair of shirts and 10 pair of pants,” she told us.
Ashland University's College of Business Dean Elad Granot calls the tax-free weekend a political stunt.
"The data shows that for the state it's pretty much a wash,” said Granot. “They're not losing any revenue because most of the consumers will walk into stores and buy stuff that's covered by the tax break but then they buy a lot more things that are not."
Granot said stores make about 9 percent more on tax-free days because people buy things like electronics and other items that don't qualify for the tax break. Plus, he mentioned stores tend to have fewer things on-sale during these weekends meaning many times you're buying items at full price.
"It's a well-known technique for retailers… to up-sell as they discount in certain categories,” said Granot.
So, think about it this way. If a shirt costs $20, you'll get it for $20 during this tax-free weekend. But if that shirt goes on sale next week at a common 25 percent off, you'll save money even with the 8 percent tax added on.
"The average spent per student is $500,” Granot told us. “So, you're talking about a net savings of $40 on average. When you break it down like that, it's not as impressive as it sounds."
Ohio is one of 15 states participating in a tax-free weekend this summer and each state has different benefits. Granot said Ohio offers more conservative savings than others.
"Some states cover purchases up to $2,500,” Granot said.
His best advice: stick to a shopping list that only includes covered items and give mom and pop stores a thought.
"Shop small business. Shop local,” said Granot. “You'll see a lot more incentives from these stores as they are trying to compete with the big chains.”
The tax-free back-to-school weekend started about 20 years ago in New York. This is the third year that Ohio is participating.
We asked state lawmakers who supported the Tax-Free Weekend legislation to comment on Granot’s statement about it being a “political stunt.” They tell us it's a win-win for all Ohioans and the event does save people money.
