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Ohio Sales Tax Application
Sales Tax
The state of Ohio sales tax and use tax rate currently is at 5.75%. Local governments have the latitude to collect an optional local tax just as long as it does not exceed 2.25%. Within the states borders, there are about 555 local tax jurisdictions. Across the state the average local tax is about 1.403%, as well in conjunction with the state sales tax and the local tax the cities within the state of Ohio is 7.153%.

Sales and Use Tax License
Sales tax permits are mandatory for most businesses in Ohio. New businesses or if someone is initiating sales for the first time within the state of Ohio, then you will need to know and understand which business permit(s) (if any) are required. After submitting the application for a Ohio Vendor’s License, one could be ready to conduct business operations immediately.

Resale Certificate
There is no requirement in the state of Ohio for registration with the state in order to obtain a resale certificate. Resellers looking to purchase tax exempt items at retail can fill out, complete and use the Sales and Use Blanket Exemption Certificate (Form STEC B).

Retailers wishing to make purchases with the purpose of resale or execute transactions that is exempt from Ohio sales tax, one is obligated to obtain and have in their possession the necessary Ohio sales tax exemption certificate before you are authorized to make tax-free purchases.
• Blanket Exemption Certificate
• Construction Contract Exemption Certificate
• Contractors Exemption Certificate
Note: The uniform sales tax exemption certificates is also acceptable in Ohio, this is a common or general certificate that maybe used across various states.

Sales Tax Exemption Certificate – Is no more than a form presented to a vendor at the time of making a sales tax-free purchase. It is your responsibility to fill out & complete the form but responsibility falls on the vendor to validate that you are indeed qualified to make tax-exempt purchases.

• Unit Exemption Certificate – intended use for the lion’s share of the tax exempt items
• Blanket Exemption Certificate – form that can be used to purchase any/all tax exempt items in the state of Ohio

In conducting transactions, the purchaser presents the seller with their written certificate and legally documenting the exemption. Those things that are included in the certificate include:
• Date certificate was created
• Signature of buyer, agent or representative on buyer’s behalf
• Both parties’ names and addresses
• Legal stance of the exemption being utilized
• Buyer’s tax registration and/or a business license number
• Description of items buyer intends to buy or purchase
Expiration of Ohio sales tax exemption certificate
In Ohio, the Ohio sales tax exemption certificate has no hard or set date of expiration. If one’s certificate does expire, the purchaser should state their reason for exemption and present the certificate to the retailer/seller.

Blanket Resale Certificate
In Ohio, the use of blanket certificates are permitted for use. Since no expiration date is annotated any Ohio resale certificates, the assumption would be that the resale certificate is valid unless revoked in writing. As long as a vendor maintains on file a single certificate then it may be reused for all exempt purchases made between a specific buyer and that particular vendor. It is not necessary for a new certificate for every transaction between that particular vendor and buyer.

Ohio is an affiliate of the Streamlined Sales and Use Tax Agreement; the goal of this interstate partnership is to make compliance with sales tax simplistic amongst associated states. As a result of this affiliation, buyers within the state of Ohio can use the Multistate Tax Commission (MTC) Uniform Sales Tax Certificate when conducting qualifying sales tax-exempt transactions from vendors within the state.

Taxable Items
Within the state of Ohio, sales tax is legally mandated to be collected as a result of selling any/all “tangible goods” and personal property to a customer. Exceptions to this tax includes building materials, groceries and prescribed medications/drugs.

Services
Businesses within the service industry in the state of Ohio are not required to pay a sales tax, this includes freelancers and plumbers. The exception to this rule is, if a business within the service industry produces, manufactures, or makes a “tangible product” will be assessed an associated sales tax.

Shipping and Handling
Ohio’s guidance as it pertains to shipping and handling cost is very simplistic. Here’s what you should know, shipping fees/charges are seen as inclusive in the price of the item thus making that item as taxable. Sales taxes should not be assessed to those items being shipped that are exempt from taxation, thus eliminating any associated shipping and handling fees/charges.
NOTE: If a shipment contains both taxable and non-taxable items, shipping cost should only be applied to the portion of the shipment that is taxable.

Drop Shipments
In the state of Ohio, drop shipments normally are subject to state sales tax(es). Drop shipments is a commonly used business practice of shipping via a third party hired by the vendor (usually located in another state) to be transported to the purchaser.

 
 

Most Asked Questions- Ohio State Business FAQ

 

How To Buy Wholesale In Ohio?

How Do I Get A Resale Certificate In Ohio?

How Do I Get A Resale Certificate In Ohio?

How To Fill Out A Seller’s Permit?

How Do I Get A Resale Certificate In Ohio?