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Understand Sales Tax for Food & Beverage
Is food taxable in Ohio?
byApril 22, 2020
In the US, every state makes their own rules and regulations about what products are taxable and what products are tax exempt. This blog post will go over food taxability in Ohio, including Ohio’s unique rules for taxability of carry-out meals.
Are groceries taxable in Ohio?
Groceries are non-taxable in Ohio.
However, as in many states, there are exceptions. Ice sold for “food” is taxable, while ice sold for other cooling purposes is not taxable. The same goes for salt. Salt to spice up a dish is non-taxable, but salt sold to prevent accidents on slippery roads is taxable.
Also, Ohio is very limited as to what drinks can be considered non-taxable. (See Are beverages taxable in Ohio? below.)
Are meals taxable in Ohio?
This is where Ohio varies from most other states.
Prepared meals in Ohio are taxable if consumed “on the premises” where sold.
However, food that is to be consumed off the premises where sold is considered non-taxable. (Source: Ohio Code R.C. 5739.02 (B)(2).)
Let’s look at a restaurant in Ohio as an example. The restaurant serves patrons inside (dine-in) and also offers curbside pickup. The meals served to dine-in patrons would be taxable, but the meals delivered curbside for the customers to consume off-premises would not be subject to sales tax. Ohio explains this thoroughly in publication ST-2004-01.
Are beverages taxable in Ohio?
Like many states, Ohio has a complicated definitions of what is “food” and “non-food.” And drinks fall into these two categories. (Yes, drinks are food in Ohio.)
Plain unsweetened water, coffee and tea are all generally considered “food” and therefore non-taxable when bought in grocery stores or consumed off the premises where it was prepared. And coffee or tea just altered by milk or milk products are also considered non-taxable. But once sweetener (artificial or otherwise) is added, that drink becomes non-food and thus taxable.
Confusing, right? The Ohio Department of Taxation knows that, too, and has provided a handy chart for determining if beverages are taxable:
(Source: Ohio Department of Taxation)
This does not include alcohol. You can find out more about the taxability of alcohol in Ohio here.
Really, really interested in sales tax? You can read Ohio’s state code concerning the taxability of food, meals and beverages here.
How to Always Collect the Correct Amount of Ohio Sales Tax
Do you sell groceries, meals or beverages? Are you required to collect sales tax in Ohio? Then this may sound like a huge headache.
Not to worry. TaxJar has your back when it comes to collecting, reporting and filing Ohio sales tax.
With the TaxJar API, you can be sure you’re collecting the right amount of sales tax on every transaction. Our product tax codes ensure you do collect sales tax on that sugary beverage but don’t collect sales tax on that plain coffee drink.
Not to mention, most eCommerce businesses have nexus in multiple states. For example, groceries are taxable in some states, but non-taxable in others. Others have different definitions of what they consider taxable beverages. And unlike Ohio, most states consider prepared meals, even if confused off the premises, taxable. With TaxJar, you’ll collect the right amount of sales tax from every customer, in every state, every time.
Further food and meal taxability resources:
- Sales Tax by State: Are grocery items taxable?
- Sales Tax by State: To-Go Restaurant Orders
- Is the food I sell on my food truck taxable?
- Ohio Sales Tax Guide for Businesses
Ready to automate sales tax collection, reporting and filing? Click here for more on how TaxJar can take the headache out of sales tax in your food & beverage business.