ST 1989-01 - Drop Shipments - November, 1989
This release is intended to reiterate the Ohio Department of
Taxation's position with regards to the typical drop shipment
situation. This situation is as follows:
In the above situation, Party A has no obligation to collect
the Ohio use tax as their sales to Party B are exempt for
reason of "resale." It is our position that Party A should
require an exemption certificate (statement) from Party B
indicating "resale" as the statutory claim for exemption.
This certificate (statement) protects Party A if Party A
should be audited by the State of Ohio.
In the above situation, we would encourage Party B to
register with Ohio and begin collection of the Ohio use tax
even though Party B may not have nexus with Ohio. Party B's
refusal to register does not relieve the Ohio consumer from
the responsibility of paying the Ohio use tax on taxable
purchases. If requested by the Department of Taxation, Party
A must provide all pertinent information concerning these
transactions which would allow us to collect the use tax due
from Ohio consumers.
If you have any questions regarding this matter, you should
call us at 1-888-405-4039.
OHIO RELAY SERVICES FOR
THE HEARING OR SPEECH IMPAIRED