Sales Tax APIThe same engine Zamp customers use.Tangled in the web of Ohio sales tax complexities or flustered by filing deadlines? This guide will help you decode sales tax rates across Ohio’s counties and cities, as well as answer some questions you may have, like how to collect sales tax in Ohio.
Finally, we’ll give you an exceptional sales tax solution to help you breeze through sales tax complexities and ensure tax compliance.
Collecting Ohio Sales Tax from Customers
Explore the answers to some questions you may have on Ohio sales tax collection:
Do I Have to Collect Ohio Sales Tax from Customers?
Here’s what you require to collect sales tax in Ohio:
- You need a sales tax nexus in Ohio.
- You have to sell taxable products or services in Ohio.
What Creates a Sales Tax Nexus in Ohio?
Activities that create nexus include:
- Economic Nexus: Businesses making taxable sales of more than $100,000, or 200 separate transactions to buyers in the state in the past tax year.
- Physical Location: Businesses having a store, office, warehouse, or other place of business.
- Employee Location: Businesses with employees, contractors, salespeople, installers, other personnel, or a third-party affiliate in the state.
- Trade Shows: Businesses that have more than seven instances of nexus-creating activities in the state and their sales exceed $25,000.
Learn more about sales tax nexus and when you need to collect sales tax.
Do I Have to Collect Sales Tax from Ohio Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
No.
Ohio has a marketplace facilitator law. This means 3rd party marketplaces such as Walmart or Amazon should collect sales tax on behalf of 3rd party sellers selling on that marketplace.
If you have a sales tax nexus in Ohio, remember you still need to collect sales tax on your other non-marketplace Ohio sales.
Taxable Products in Ohio
Most tangible personal property like computer software and soft drinks are taxable in Ohio. However, like most states, basic necessities like food and groceries enjoy a sales tax exemption.
Let’s take a closer look at the taxable services and products in the state.
Are Groceries Taxable in Ohio?
No, groceries are not taxable at the state level in Ohio. However, local taxes may apply.
Is Clothing Taxable in Ohio?
Yes, clothing is taxable in Ohio.
Are Digital Products Taxable in Ohio?
Yes, digital goods such as e-books are taxable in Ohio.
Is Software-as-a-Service (SaaS) Taxable in Ohio?
SaaS for business use is taxable in Ohio, but SaaS products for personal use are non-taxable.
Are Services Taxable in Ohio?
Some services are taxable in Ohio. According to the Ohio Department of Taxation, taxable services include:
- 1-900 telephone numbers that provide information services
- Automatic data processing for use in a business (including internet access charges and email service charges)
- Car washes
- Exterminating services
- Hotel room rental
- Installation of tangible personal property (unless that property is exempt from sales tax)
- Landscaping and lawn care
- Laundry and dry cleaning services
- Personal care – skincare, massage, manicures, pedicures, tattoos, tanning, etc.
- Physical fitness facilities
- Private investigation services or security services
- Recreation and sports clubs
- Repair of tangible personal property (unless that property is exempt from sales tax)
- Satellite broadcasting services
- Snow removal
- Storage of tangible personal property
- Telecommunication services (with some exceptions)
- Towing services
- Transportation (except public transit systems or commercial airlines)
Tax-Exempt Items
Some of the tax-exempt items in Ohio are:
- Copyrighted motion picture films for exhibition purposes.
- Food that’s consumed off the selling premises.
- Food sold to students in a dormitory, school cafeteria, fraternity or sorority house
- Newspapers (including community newspapers and national newspapers, such as the Wall Street Journal and other unbound publications.)
- Sales made by churches and nonprofit charitable organizations that don’t exceed six days per tax year. This excludes sales of motor vehicles, titled watercraft, titled outboard motors, off-highway motorcycles, all-purpose vehicles, and personal watercraft.
- Sales to organizations that have been granted and have maintained 501(c)(3) status by the Internal Revenue Service.
- Sales of personal computers and other components, like monitors and keyboards, to an individual who’s certified to teach in an elementary or a secondary school in Ohio. They should use it to prepare or teach elementary and secondary school students.
- Sales of animals by nonprofit animal shelters and county humane societies.
- Drugs that are intended to be distributed free of charge to a practitioner licensed to prescribe, dispense, and administer drugs to a human being. Drugs prescribed by practitioners are also tax-exempt.
- Sales of used manufactured homes and used mobile homes.
- Gas, water, steam, and electricity delivered through pipes, conduits, or wires and sold by a public utility or municipal gas utility.
Zamp Tip
You can also claim a sales tax exemption using the Sales and Use Tax Unit Exemption Certificate.
How to Register for an Ohio Seller’s Permit
Register for an Ohio seller’s permit online at the Ohio Department of Taxation.
Find out how to register for a seller’s permit in every US state.
Do I Need an Ohio Sales Tax License if I’m Only a Wholesaler?
If you have a resale certificate, wholesalers don’t have to collect sales tax in Ohio.
Do I Need an Ohio Seller’s Permit if I Only Sell Temporarily in the State?
Vendors who only sell irregularly in Ohio, such as at a tradeshow or craft fair, can apply for a Transient Vendor’s License at the Ohio Business Gateway. The fee for this license is $25.
How to Collect Sales Tax in Ohio
Sales tax in Ohio is collected in two ways:
A. How to Collect Sales Tax on Intrastate Ohio Sales
A sale is considered intrastate if it ships from an origin address in Ohio to a buyer’s address in Ohio.
Ohio is an ‘origin-based’ sales tax sourcing state. This means if you make a sale originating in Ohio and the buyer’s ship-to address is also in Ohio — you need to charge the sales tax rate at the sale’s origination point.
For instance, your business is located in Canton, Ohio, and you make a sale to a buyer in Wooster, Ohio. Then, you should charge the buyer the sales tax rate at your Canton, Ohio, location.
B. How to Collect Sales Tax on Interstate Ohio Sales
A sale is considered interstate if the item ships from outside Ohio and the seller isn’t otherwise ‘engaged in business’ in the state.
For sales that don’t originate in Ohio, you need to charge the sales tax rate at your buyer’s location.
For instance, if your business is located in Beaufort, South Carolina, and you sell to a buyer in Mason, Ohio — you should charge the buyer the sale tax in Mason.
Should You Collect Sales Tax on Shipping Charges in Ohio?
Shipping and delivery charges are taxable in Ohio.
Learn about sales tax on shipping in every US state here.
How to File and Pay Sales Tax in Ohio
When your sales tax filing due date approaches, you can file Ohio sales tax returns in multiple ways:
- File and pay online: Ohio requires electronic sales tax filing through the Ohio Business Gateway. You can pay the sales tax owed via ACH debit, ACH credit, or credit card.
- Telefile: Telefile in Ohio by calling 1-800-697-0440 that’s available to vendors who have a regular county vendor’s license number, which begins with 01 through 88.
- Let Zamp handle your Ohio sales tax filing and remittance so you never have to look at a sales tax return again!
