Ohio Sales Tax Guide 2024: Compliance, Rates, and Regulations for Ecommerce Businesses

Sales tax at a glance

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Ohio sales tax rates & calculations in 2023

The Ohio sales tax rate in 2023 is 5.75% statewide. This comprises a base rate of 5.75% plus mandatory local rates ranging from 0% to 2.25%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 8%.

List of local sales tax rates in Ohio

You can look up the full table of sales tax rates in each city and county in Ohio here. Here's a snippet:

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Recent tax rate changes in Ohio

There have been no recent sales tax rate changes in Ohio as of 2023. The statewide sales tax rate has remained at 5.75% since 1934.

FAQs

How do you calculate Ohio sales tax?

To calculate Ohio sales tax, use the formula:

Sales tax = (5.75% + local rate) * purchase price

For an 8% combined rate with a $100 purchase, the sales tax would be $8.

What are the penalties for not paying Ohio sales tax?

Penalties for late filing or nonpayment of Ohio sales tax include interest charges and late filing penalties. The standard late filing penalty is $50 per month up to a maximum of $500. Interest accrues at the federal short-term rate plus 5%.

What's the difference between destination-based and origin-based sales tax states?

Origin-based states charge sales tax based on the seller's location, while destination-based states charge sales tax based on the location of the buyer.

Is Ohio a destination-based or origin-based sales tax state?

Ohio is an origin-based sales tax state. Sales tax is charged based on the location of the seller, not the buyer.

Is Ohio a streamlined sales tax state?

Ohio is a full member state of the Streamlined Sales and Use Tax Agreement (SSUTA).

Sales tax nexus table in Ohio

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FAQs

Do i need an Ohio seller's permit if i’m only a wholesaler?

Yes, you likely still need an Ohio seller's permit, even if you only sell wholesale. Wholesale sales in Ohio are generally taxable unless the buyer provides a valid resale certificate. Check with the Ohio Department of Taxation to confirm your business's requirements.

Do i need an Ohio seller's permit if i only sell temporarily in the state?

If you are making retail sales in Ohio, even temporarily, you likely need an Ohio seller's permit. Temporary sellers may qualify for a transient vendor's license instead of a regular seller's permit. Confirm with the Ohio Department of Taxation whether a transient vendor's license would apply to your business.

Exemptions from sales tax in Ohio

Ohio provides sales tax exemptions on specific categories of products and buyer types, including but not limited to:

• Prescription drugs
• Groceries
• Some medical devices
• Sales for resale with a valid certificate
• Sales to tax-exempt organizations like charities, schools, and government agencies

FAQs

Are groceries taxable in Ohio?

Most grocery food items are exempt from sales tax in Ohio. However, prepared foods, soft drinks, dietary supplements, and other grocery items are taxable. 

Is clothing taxable in Ohio?

Clothing is generally taxable in Ohio unless specifically exempted. For example, most protective equipment and uniforms are exempt from sales tax. 

Are digital products taxable in Ohio?

Yes, digital products like ebooks, music, movies, and software downloaded electronically are generally taxable in Ohio. Exceptions may apply to digital textbooks.

Is software-as-a-service (saas) taxable in Ohio?

Yes, software-as-a-service (SaaS) is considered taxable electronically delivered software in Ohio.

Are services taxable in Ohio?

Some services are taxable in Ohio, while others are exempt. Standard taxable services include landscaping, pet grooming, and investigative services.

Excise taxes in Ohio (alcohol, tobacco, gasoline, fuel, marijuana)

Ohio levies selective excise taxes on the sale or distribution of motor vehicle fuel, alcoholic beverages, tobacco products, and medical marijuana. These are in addition to standard sales tax. See current excise tax rates in Ohio:

• Motor vehicle fuels like gasoline and diesel: $.385 per gallon
• Wine: $1.07 per gallon
• Beer: $.18 per gallon
• Liquor: From $3.38-$4.05 per gallon, depending on proof
• Cigarettes: $1.60 per pack of 20
• Other tobacco products: 17% of the wholesale price
• Medical marijuana: 10% state cultivation privilege tax plus a $9.26 effective tax rate per gram of THC content

Ohio has no general excise taxes that broadly apply to food and beverage sales.

Remote sellers in Ohio

Out-of-state sellers exceeding the economic nexus thresholds of $100,000 in gross Ohio sales or 200 transactions must register for a seller's permit and collect Ohio sales tax.

Sellers can register through the Ohio Business Gateway.

Prepaid sales tax rates for fuel products in Ohio

Ohio requires prepaid sales tax on fuel products like gasoline, diesel, and aviation fuel. Prepaid rates vary by fuel type and change quarterly.

Discretionary taxes in Ohio (local sales taxes)

In addition to the statewide 5.75% sales tax, Ohio counties and transit authorities can levy local "permissive" taxes on sales and services up to 2.25%. These district taxes can bring the total tax above 8%.

Use Ohio's sales tax lookup tool to find combined state and local rates.

Collecting sales tax in Ohio

Let's look at the steps to collect sales tax in Ohio now.

How to collect sales tax in Ohio if you are not based in Ohio (out-of-state)

Even if you do not have a physical presence in Ohio, you may still meet the economic nexus thresholds to establish a requirement for sales tax collection. There are two main ways sellers can meet the threshold for sales tax obligations:

• Physical nexus: Having property, employees, inventory, or other tangible assets located within Ohio
• Economic nexus: $100,000 or more in gross receipts from sales delivered into Ohio or 200 or more separate transactions providing goods or services into Ohio

If you exceed either economic nexus threshold, you must register with the Ohio Department of Taxation for a seller's permit and begin collecting sales tax.

You can register for an out-of-state seller's permit through Ohio's online One Stop Business Registration. This will allow you to legally conduct business and collect sales tax in Ohio without a physical presence.

Should you collect sales tax on shipping charges in Ohio?

Yes, Ohio considers delivery charges as part of the sales price. Ohio's associated shipping charge is also generally taxable if the product being shipped is taxable.

There is an exception if you ship taxable and non-taxable items in the same shipment. In that case, you would allocate the delivery charge based on the proportion of taxable vs non-taxable products to determine the taxable portion of the shipping fee.

Filing and paying sales taxes in Ohio

All businesses registered for a seller's permit in Ohio must file sales tax returns, even if no tax was collected for the period. You must file the UST-1 form electronically through the Ohio Business Gateway.

Sales tax return filing schedule and due dates in Ohio

The Ohio Department of Taxation assigns a monthly or semi-annual filing frequency. Sales tax returns are due on the 23rd day of the month following the end date of the filing period.

Monthly:

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Semi-Annual:

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Filing penalties in Ohio

The standard penalty for late filing or non-payment of Ohio sales tax is $50 per month up to a maximum of $500. Interest accrues at the federal short-term rate plus 5%.

Extreme late filings beyond 60 days may also incur additional late filing penalties. See all Ohio sales tax penalties and interest rules here.

When are returns due in Ohio?

Sales tax returns in Ohio are due on the 23rd of the month following the end of the filing period. For example, returns must be filed by February 23rd for the January filing period.

Faqs

I didn’t collect any Ohio sales tax during this period. do i still need to file a return?

Yes, every business with an active seller's permit must file a sales tax return for each assigned period in Ohio, even if $0 tax was collected.

Can i amend an Ohio sales tax return?

You can file an amended return in Ohio using the form UST-1A. You will need to calculate any additional tax owed and applicable interest and late payment penalties.

What is the penalty for filing and paying Ohio sales tax late?

The standard late filing penalty is $50 per month up to $500. Late payments also accrue interest at the federal short-term rate plus 5%. Total penalties and interest generally cannot exceed 50% of the tax due. 

Audit & appeals process

Ohio's audit & appeals process involves several steps if a business is audited and disputes the findings. It begins with the tax audit or conducting the sales and use tax audit.

If the business disagrees with the audit results, it can file a petition for reassessment or a refund claim. The business can further appeal to the Ohio Board of Tax Appeals if those appeals are denied.

Ohio sales tax audit process

The basic steps in an Ohio sales tax audit are:

1. Audit scheduling and information request
2. Field audit at the business location
3. Audit findings and assessment report issued
4. Opportunity to appeal assessment

What to expect during the audit?

During the audit, the tax agent will review your sales tax returns, exemptions claimed, and records of transactions. They will likely interview you about your processes and identify any areas of non-compliance.

Be prepared to provide all resale certificates, exemption certificates, and other records supporting why tax was not charged on certain transactions.

After the audit – appealing the results

If you disagree with the audit assessment, you can file a petition for reassessment or refund claim within 60 days. Further appeals can then be made to the Ohio Board of Tax Appeals.

Contesting audit findings in Ohio early helps you avoid interest and penalties that continue accumulating while under appeal. 

Sales tax registration

Here are the critical steps for registering for sales tax in Ohio:

How to register for sales tax in Ohio

You can register online through Ohio's One Stop Business Registration. You'll need to provide:

• Business information and ownership details
• Federal EIN
• Anticipated monthly sales
• Ohio vendor's license fee of $25

Once registered, you'll have a seller's permit to collect and file Ohio sales tax.

Registration requirements for online sellers in Ohio

Remote sellers exceeding $100,000 in Ohio sales or 200 transactions must register for an Ohio seller's permit per economic nexus rules.

Marketplace facilitators with over $100,000 in Ohio-facilitated sales must also collect tax.

Cost of registration for an Ohio sales tax license

Ohio's vendor's license fee is $25, paid at the time of online registration. Out-of-state sellers can register for no fee.

More information & contacts

For sales tax questions, contact the Ohio Department of Taxation:

• Authority Name: Ohio Department of Taxation
• Phone number: (888) 405-4039
• Website: tax.Ohio.gov

There you have it, an in-depth guide to Ohio sales tax. If you need help filing sales tax for your ecommerce store, get a demo with Numeral.