Ohio sales tax guide

Welcome to the Ohio sales tax guide, where we will discuss the most frequent questions about the topic, including what is the sales tax rate in Ohio, how to register as an Ohio sales tax (OH) collector, etc. If you haven‘t found the answer to your questions in the guide, please get in touch with the 1StopVAT team for guidance and help.

In focus: Sales tax in Ohio (OH)

Sales tax is one of the most common taxes across the globe. In other regions, it is called the value-added tax, or VAT in short. This type of tax is generally a consumption tax. It is levied on the final consumer and allows for deductions for business in the value chain. The tax is typically included in the final price of a product (or a service) and is charged at the moment of purchase. Once a seller begins charging the sales tax Ohio, it becomes responsible for collecting it and providing the tax accounts to the Ohio Department of Taxation. The Ohio Department of Taxation administers the state’s sales tax and issues seller’s permits to new registrants. 

Even remote sellers must be aware of the Ohio tax sales thresholds as distant sellers that have formed a nexus with the state must become registered Ohio sales taxpayers. Once a company becomes a registered sales tax collector, it has to begin adding the correct Ohio sales tax rates to the prices of its goods.

Like the majority of other states in the US, Ohio sales tax rate consists of the base rate and the local sales tax rates Ohio -selling companies have to add on top of the base rate. Please find more about how much sales tax in Ohio you should collect below.

Ohio sales and use tax differ as the seller accounts for the sales tax, and the use tax is accounted for by the buyer whenever she buys taxable goods or services from tax-exempt organizations. Keep in mind that payers of both sales and use tax Ohio must stick to tax filing deadlines assigned by the Ohio Department of taxations.

Registering for Ohio state sales tax: the criteria

There are several conditions that make a company eligible for registering as a sales taxpayer:

• A company has a strong economic tie (nexus) with Ohio (please find more below).
• It receives revenue selling taxable services or goods to Ohio residents.
• The purchasers are required to pay sales tax by the state.

Ohio sales tax nexus

Here are the types of solid ties with Ohio that make registration at the Ohio Department of Taxation mandatory:

• Physical nexus is when a company has employees, an office, or other facilities in the state.

Different criteria apply to remote sellers:  

• Once a company’s gross revenue exceeds USD 100 000 in the previous year and makes 200 or more separate sales, an economic nexus is formed. Please keep in mind that sales with 0 sales tax rate Ohio must be included in the transaction count.
• Inventory in the state: storing inventory in warehouses in Ohio (incl. Fulfillment by Amazon) forms a nexus.
• Network nexus is whenever a company provides distribution enhancement services, and the sale of services exceeds USD 500 000 in the last 12 months.
• Trade shows. A nexus is formed if a company sells over USD 25 000 during Ohio trade shows in a year.
• Click-through nexus and software nexus were repealed in 2019.

Taxable items in Ohio

Before figuring out how much is the sales tax in Ohio that a company must charge, the taxation status of the items must be double-checked.

Most transactions are taxable with the sales tax for Ohio. However, according to the Ohio Department of Taxation, groceries (including candy) and prescription drugs are tax-exempt. Other exemptions include machinery, medical devices, periodicals, and customs services.

The taxation of services is slightly more complex, and each economic activity based on service providers must be checked with the tax authority separately.

Ohio sales tax online registration

After completing a quick online registration procedure, the sales tax license can be received from the Ohio Department of Taxation. The application procedure takes minutes and requires you to provide personal and business information, including the company size and related details. If you have trouble registering or figuring out your applicable Ohio state sales tax rate, please get in touch with us.

What is the current sales tax in Ohio

To calculate what’s the sales tax in Ohio that you should add to your prices, you will need to know the exact buyer’s location, as the total Ohio sales tax percentage consists of the base and local rates.

The general sales tax rate in Ohio is 5.75 %, while the local or municipality rates can go up to 2.25 %, making the maximum total rate 8 %. For an easier tax rate calculation, please use our Sales Tax Calculator or contact the 1StopVAT team.

Tax deadlines

Ohio Department of Taxation assigns monthly, quarterly, or semi-annual filing periods depending on the size of the business. It is advised to always stick to the deadlines set, as late filing can result in penalties.

Sales Tax rates by states