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June 6, 2005 - Recent legislation (S.B. 26) has delayed the requirement that regular county vendors switch to destination sourcing for collection of Ohio sales tax. Previously, the law required that all vendors switch to destination sourcing by July 1, 2005. Under the new law, the requirement to switch to destination sourcing will be phased in based on a vendor’s volume of taxable delivery sales. Delivery sales are defined as taxable sales delivered outside the vendor’s tax jurisdiction in which a vendor does not have a fixed place of business. Starting May 1, 2006, those vendors with delivery sales greater than $30 million begin collecting tax by destination. On May 1, 2007, those vendors with delivery sales greater than $5 million will change. All other vendors must convert to destination sourcing no later than January 1, 2008. Any vendor may change to destination sourcing prior to the date on which they are required to do so, but once a vendor has changed, it cannot go back to the previous sourcing method. Ohio vendors are eligible for partial compensation for their costs associated with converting to destination sourcing.
Another bill (H.B. 66), currently being considered by the General Assembly, would change the state sales tax rate to 5.5% on July 1, 2005. Amendments to this bill may further change that rate, and may occur too late for this Department to provide vendors with timely notice. You can get current information on our website, tax.ohio.gov, or by calling us at 1-888-405-4039. You should also watch your local newspapers or broadcast news media.
