Ohio Sales Tax Guide for Businesses
- Sales Tax Rate
- Local Taxes
- Department of Taxation
- Tax Line
We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Ohio, and if so, how best to tackle the sales tax situation in the Buckeye State.
After reading this, you’ll know:
- Do you or don’t you need to collect Ohio sales tax?
- Which customers do you collect from?
- How much do you collect?
- What do you do with all the sales tax you’ve collected?
- Way more than you probably ever wanted to know about Ohio sales tax!
Do you have sales tax nexus in Ohio?
Good news! You only have to begin thinking about Ohio sales tax if you have sales tax nexus in Ohio.
“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.
Ohio considers a seller to have sales tax nexus in the state if you have any of the following in the state:
- a place of business within this state, whether operated by employees or agents of the seller, by a member of an affiliated group of which the seller is a member, or by a franchisee using a trade name of the seller
- employees, agents, representatives, solicitors, installers, repairpeople, salespeople, or other individuals in Ohio for the purpose of conducting its business
- a person in the state for the purpose of receiving or processing orders of its goods or services
- makes regular deliveries of tangible personal property into this state by means other than common carrier (For example, the out-of-state seller has goods delivered to this state in vehicles which the out-of-state seller owns, rents, leases, uses, or maintains or has goods delivered by another member of an affiliated group, of which the out-of-state seller is a part, acting as a representative of the out-of-state seller)
- owns tangible personal property that is rented or leased to a consumer in this state, or offers tangible personal property, on approval, to consumers in this state
- owns, rents, leases, maintains, or has the right to use and uses tangible personal or real property that is physically located in this state
- is registered with the secretary of state to do business in this state or is registered or licensed by any state agency, board, or commission to transact business in this state or to make sales to persons in this state
You can click here to read exactly what the Ohio Department of Revenue (Ohio’s taxing authority) has to say about what constitutes sales tax nexus in Ohio (this link opens as a document).
Do you have sales tax nexus in Ohio if you sell on FBA?
If you sell on Amazon FBA, you may have sales tax nexus in Ohio. Storing physical products in a state can create sales tax nexus, and Ohio is home to at least one Amazon fulfillment center (with, as of this writing, more opening soon.)
To determine whether or not you have items stored in an FBA warehouse in Ohio, you can do one of two things:
- Login to Amazon Seller Central and pull your Inventory Event Detail Report
- Sign up for a 30-day free trial of TaxJar and find out from where your Amazon inventory ships with our Amazon badge feature
You may find that your inventory is stored in an Ohio fulfillment center. Here’s the most updated list:
|Warehouse Code||Address||County||Tax Rate|
|CMH2||6050 Gateway Court, Obetz, OH 43125||Franklin||7.5%|
Is what you’re selling even taxable?
You’ve probably read this far because you realized you have sales tax nexus in Ohio. Your next step is to determine if what you’re selling is even taxable.
Services in Ohio are generally not taxable. So if you’re a freelance writer or a plumber, you’re in luck and you don’t have to worry about sales tax. But watch out – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.
Tangible products are taxable in Ohio, with a few exceptions. These exceptions include certain foods, prescription drugs, some building materials and more. Check here for a list of non-taxable tangible goods in Ohio.
So if you sell toys, then charge sales tax to your Ohio customers.
But if you’re a graphic designer, don’t charge sales tax to your Ohio customers.
If you have sales tax nexus in Ohio and your products are taxable, your next step is to register for a sales tax permit.
How to Register for a Sales Tax Permit in Ohio
Sellers with sales tax nexus in Ohio must apply for an Ohio sales tax permit.
Don’t skip this step! Many states consider it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Ohio.
Ohio has also released a tutorial video on registering for a sales tax permit:
How to Collect Sales Tax in Ohio
So you’ve determined that you have sales tax nexus in Ohio and what you’re selling is taxable. And you’re all set and registered for your Ohio sales tax permit.
The next step is to determine how much sales tax to collect.
The sales tax rate you collect in Ohio depends on whether you are based in Ohio or out-of-state.
How to Collect Sales Tax in Ohio if you are Based in Ohio
Ohio is an origin-based sales tax state. So if you live in Ohio, collecting sales tax is fairly easy. Collect sales tax at the tax rate where your business is located.
Example: You live and run your business in Euclid, OH in the 44117 zip code you would charge your buyers the 8% sales tax rate at your location. The zip code at the buyer’s location doesn’t matter.
If you have more than one location in Ohio, then you would base the sales tax rate you charge on the point of origin of your sale.
How to Collect Sales Tax in Ohio if you are Not Based in Ohio
This is where things get trickier for online sellers. Ohio wants sellers who made a sale into Ohio from outside the state to charge sales tax based on the destination of the buyer.
Example: You live in Colorado, but have sales tax nexus in Ohio, perhaps due to having an employee living there or products stored there. If you make a sale to someone living in Kettering, OH in the 45429 zip code then you’d charge the Kettering sales tax rate of 7.25%.
What are the Amazon sales tax settings for Ohio?
If you are an Amazon pro seller and use Amazon to collect sales tax, be sure you have your Ohio sales tax settings entered correctly. Find step-by-step instructions for setting up your Amazon sales tax settings here.
|If you are a||State tax||County tax||City tax||District tax||Custom rate||Is shipping taxable?||Is gift wrapping taxable?|
|Seller living in Ohio||X||X||X||X||N/A||Yes||No|
|Seller living outside of Ohio||X||X||X||X||N/A||Yes||No|
Should you collect sales tax on shipping charges in Ohio?
Ohio considers delivery charges part of the price of a sale and therefore taxable.
Read a full explanation of sales tax on shipping in Ohio here.
When are Ohio Sales Tax Returns Due?
Ohio sales tax returns are always due the 23rd of the month following the reporting period. Ohio requires that sellers file either monthly or semi-annually. You’ll be assigned a sales tax filing frequency when you apply for your Ohio sales tax permit.
Here are Ohio’s sales tax due dates for 2016:
2016 Ohio Monthly Sales Tax Filing Due Dates
|Taxable Period||Due Date|
|January||February 23, 2016|
|February||March 23, 2016|
|March||April 25, 2016*|
|April||May 23, 2016|
|May||June 23, 2016|
|June||July 25, 2016*|
|July||August 23, 2016|
|August||September 23, 2016|
|September||October 24, 2016*|
|October||November 23, 2016|
|November||December 23, 2016|
|December||January 23, 2017|
2016 Ohio Quarterly Sales Tax Filing Due Dates
|Taxable Period||Due Date|
|Q1 (Jan - Mar)||February 23, 2016|
|Q2 (Apr - Jun)||August 25, 2016*|
|Q3 (Jul - Sep)||October 24, 2016*|
|Q4 (Oct - Dec)||January 23, 2017|
2016 Ohio Semiannual Sales Tax Filing Due Dates
|Taxable Period||Due Date|
|Semiannual (Jan - Jun)||July 25, 2016*|
|Semiannual (Jul - Dec)||January 23, 2017|
*indicates a due date pushed back due to a weekend or holiday
Click here for a chart of Ohio sales tax filing due dates in 2016.
How to File Sales Tax in Ohio
When it comes time to file sales tax in Ohio you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
We’ll walk you through these steps.
How to Calculate How Much Sales Tax You Owe in Ohio
Calculating how much sales tax you should remit to the state of Ohio is easy with TaxJar’s Ohio sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Ohio sales tax return will be waiting for you in TaxJar. All you have to do is login!
How to File and Pay Sales Tax in Ohio
You have two options for filing and paying your Ohio sales tax:
- File online - The state of Ohio requires merchants to file sales tax online. You can file sales tax online Ohio Department of Taxation, and also remit your payment through their online system.
- File by mail - FIll out form UST-1, though Ohio encourages sellers to file online
- AutoFile - Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
Other Facts You Should Know about Ohio Sales Tax Filing
There are a few more things you should know about sales tax in Ohio:
According to the Ohio Department of Taxation, if you fail to file or pay on time, a penalty equal to the greater of: i) $50 per month or fraction of a month, up to $500, or (ii) 5% per month or fraction of a month, up to 50%, of the sum of the taxes required to be shown on the report or return, for each month or fraction of a month that elapses between the due date, including extensions of the due date, and the date on which the return is filed will be levied.
Other penalties for fraud or serial offenses include higher penalties and even criminal charges.
Ohio requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay. Click here for a list of states that require zero sales tax returns.
Many states understand that collecting sales tax is a difficult burden on merchants, and will provide a discount to help alleviate some of this burden. According to the Ohio Department of Taxation:
“The discount rate is .75 of 1% (0.0075) of the tax liability reported on line 6 of the Universal Sales Tax (UST-1) return. The discount only applies if the UST-1 return and full payment are received by the Ohio Department of Taxation on or before the due date.”
Click here for more about state sales tax discounts.
Ohio Sales Tax Holidays
Alabama has a sales tax holiday in 2016:
August 5-7, 2016: Back to School Sales Tax Holiday
Check here for more information about Ohio’s sales tax holidays including how to handle sales tax holidays as an online seller.
And that’s it. You’ve mastered Ohio sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.
Ohio Sales Tax Resources
For more about Ohio sales tax, check out the Ohio section of the TaxJar blog.