It was reported in February that the Ohio Senate was looking to spur economic activity via the often used school sales tax holiday. This weekend, I had the pleasure of shopping for new vehicle for the family. It struck me as I was signing the mountain of documents in the financing department that if the Ohio legislature is wanting to spur economic activity through a reduction in sales tax why not lower the sales tax on car purchases? Of all the things I think South Carolina does wrong, there is one issue that I think they have mostly correct. In South Carolina, a 5% sales tax is applied to the purchase of a vehicle, but it is capped at $300.
I do not wish to engage in a discussion on the potential regressivity of the tax, as there could always be modifications, but the high sales tax in Ohio hinders the average family in affording the car they want/need. The sales tax on our modest used minivan ran slightly north of $1,300. This amount is not an insubstantial amount of money. With a government that professes to be be interested in spurring economic growth, a state that employs many in the car manufacturing business, and the anti-tax sentiment of the current state administration, we should take a serious look at the application of the sales tax to an item so integral to our daily lives.