Ohio Sales Tax Rates

Total Range for 2024

5.75%–8%

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Nexus in Ohio

In Ohio, just like many other states, there are two main ways to establish nexus, which triggers the obligation for a business to collect and remit sales tax: physical nexus and economic nexus.

  • Physical Nexus: A business has physical nexus in Ohio if it has a physical presence in the state. This includes, but is not limited to:
    • Maintaining an office, warehouse, or store in Ohio
    • Having employees, representatives, or agents soliciting sales in Ohio on your behalf
    • Owning or leasing tangible personal property in Ohio (with some exceptions)
  • Economic Nexus: Even without a physical presence, a business can still have nexus in Ohio if it meets the state’s economic nexus thresholds. As of August 1, 2019, Ohio adopted an economic nexus standard that requires any person or business without a physical presence in the state to obtain an Ohio seller’s use tax license and collect and remit applicable sales tax if the business meets one or both of the following criteria in the current calendar year or the previous calendar year:
    • The business has gross receipts into Ohio exceeding $100,000.
    • The business has at least 200 transactions in Ohio.

Important Notes:

  • Gross receipts include both taxable and non-taxable sales.
  • If a business meets the economic nexus thresholds, it must register for a seller’s use tax license and start collecting sales tax from Ohio customers on the very next sale.

Understanding your nexus in Ohio is crucial to determine your sales tax collection obligations.  If you’re unsure whether your business has nexus in Ohio, it’s always best to consult with a tax professional like Yonda Tax for guidance.

Is what you’re selling taxable in Ohio?

Ohio applies sales tax to most tangible personal property, some specified digital products, and certain services. Here’s a breakdown to help you determine if your product or service is taxable:

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How to Register for Sales Tax in Ohio?

If you’ve determined you need to collect sales tax in Ohio, registering for a Vendor’s License is the next step. Here’s how you can do it:

  1. Online Registration:

The Ohio Department of Taxation offers online registration through their Business Services Gateway. This is generally the fastest and most convenient method. Here’s what you’ll need:

  • Business name and address
  • Contact information
  • Federal Employer Identification Number (EIN)
  • Business activity start date
  • Projected monthly sales and taxable sales
  • Products or services offered
  1. Mail-in Registration:

If online registration isn’t an option, you can also register by mail using an application form (Application for a Vendor’s License – Form ST-100).

  • Download the Ohio Application for a Vendor’s License (Form ST-100) from the Department of Taxation website
  • Complete the form following the instructions provided.
  • Mail the completed application form along with any required documentation to the address listed on the form.

Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.

Additional Notes:

  • You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability.
  • Once your application is approved, you’ll receive a Vendor’s License with your license number. You’ll need this number to collect and report sales tax.

For more detailed information and specific instructions, visit the Ohio Department of Taxation website or contact them directly.

How to Collect Sales Tax in Ohio

Once you’ve registered for a Vendor’s License and received your license number in Ohio, here’s what you need to know about collecting sales tax:

  1. Determine the Tax Rate:

The sales tax rate in Ohio is a combination of a statewide base rate and potential additional local rates.  The base rate is currently 5.75%. However, many counties, cities, and special districts in Ohio impose additional local sales taxes on top of the base rate.

You can find the specific sales tax rate for the location where your business is located or where you’re delivering goods/services by using the Ohio Department of Taxation’s Sales and Use Tax Rate Search Tool ([invalid URL removed]).

  1. Apply the Tax Rate:

Once you know the applicable tax rate (statewide base rate + any local rates), simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.

  • Example: If you sell a product for $100 in a location with a combined sales tax rate of 7.25% (4.75% base rate + 2.5% local rate), the sales tax amount would be $7.25 (100 x 7.25%). You would collect $107.25 ($100 + $7.25) from the customer.
  1. Keep Good Records:

It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the state. Your records should include:

  • Sales receipts
  • Tax rates applied
  • Amount of sales tax collected for each transaction
  • Details of exempt sales
  1. Report and Remit Sales Tax:

Ohio businesses are required to file sales tax returns and remit the collected tax on a regular basis. The specific filing frequency depends on your business’s total sales tax liability.

  • Generally, businesses with lower sales tax liability will file quarterly, while those with higher liability may need to file monthly.
  • You can find detailed information on sales tax filing deadlines and remittance procedures on the Ohio Department of Taxation website or by contacting them directly.

Additional Tips:

  • Consider hiring a sales tax wingman to take care of calculations, filing, and remittance, saving you time and ensuring accuracy.
  • Stay informed: Sales tax laws and regulations can change, so stay updated on any changes that might affect your business, particularly regarding local tax rates.
  • Clearly display the sales tax: It’s a good practice to clearly display the sales tax amount on receipts or invoices to avoid confusion for your customers.

FAQs

ow often do you need to file sales tax returns in Ohio?

The frequency of filing sales tax returns in Ohio depends on your business’s total sales tax liability. The Ohio Department of Taxation will assign you a filing frequency when you register for your Vendor’s License:

  • Typically:
    • Businesses with low sales tax liability (under a certain threshold) will file quarterly.
    • Businesses with moderate liability may file monthly.
    • Businesses with high liability may be required to file more frequently, potentially including prepayments.

The exact thresholds and filing requirements can change, so it’s best to consult the Department of Taxation website or contact them directly for the latest information.

Do you need a seller/reseller permit?

In Ohio, a seller’s permit is called a Vendor’s License. Yes, you’ll need to register for a Vendor’s License to collect sales tax in Ohio. You can find instructions on registering for a Vendor’s License in the “How to Register for Sales Tax in Ohio” section above.

When are Ohio's Returns Due?

Sales tax return deadlines in Ohio depend on your assigned filing frequency (monthly or quarterly) and the last day of the month your permit became effective.

You can find a detailed breakdown of filing deadlines based on your filing frequency and registration month on the Department of Taxation website.

Are there any exceptions to the sales tax on digital products?

There are limited exceptions for certain digital products in Ohio. Here’s a quick breakdown:

  • Taxable: Downloaded digital products like ebooks, audiobooks, and music downloads purchased for personal use are subject to sales tax in Ohio.
  • Non-Taxable: Services related to digital products, like separately charged subscriptions to streaming services or online gaming platforms, may not be taxable.

Contact Yonda Tax Today

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