February 1, 2007 - Ohio Department
of Taxation Announces Delay in Destination
COLUMBUS, Ohio - Ohio retailers whose
delivery sales in calendar year 2005 totaled less than $30
million are getting a break from a provision of the
Streamlined Sales Tax Agreement that would have required them
to shift this year to a destination-based means of
calculating sales tax.
Ohio Tax Commissioner Richard Levin decided today to not
issue a Tax Commissioner’s Journal Entry stating that
certified service provider services are available in the
state, thus exempting retailers below the $30 million
threshold from the requirement. These retailers can continue
to calculate sales tax using origin-based sourcing, or
location of the sale, which is normally their store location.
Most retail vendors in Ohio, however, must switch to the
delivery-based system by January 1, 2008. Retailers in Ohio
that have a service or delivery license were already required
to use destination-based sourcing and must continue to do so.
If the tax commissioner had determined that certified service
provider services were being provided by the Governing Board
of the Streamlined Sales Tax Agreement, retail vendors whose
delivery sales in 2005 were less than $30 million and greater
than $5 million, would have been required to begin collecting
sales tax using destination-based sourcing – the rate in
effect at the location to which the goods were delivered –
starting May 1, 2007.
In general, a certified service provider assists the vendor
in determining the taxability and applicable tax rates for
sales both in and outside of Ohio. This is a requirement of
the Streamlined Sales Tax Agreement, in which Ohio is
participating along with more than 20 other states. The
agreement’s goal is to establish uniform sales tax policies
that enable states to collect sales tax that is currently not
being collected on many out of state sales, particular
catalog and Internet. The estimated loss of revenue to Ohio
is over $400 million annually.
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(For additional information, contact Gary Gudmundson,
Communications Director, at (614) 644-6903 or Mike McKinney,
Public Information Officer, at 614-466-5461.)