ST 2003- 11 - H.B. 95 - Storage - July 31, 2003
Am. Sub. H.B. 95 of the 125th Ohio General
Assembly included several expansions to the sales tax base.
One such expansion is found in Ohio Revised Code ("R.C.")
section 5739.01(B)(9), which applies the sales tax to:
On and after August 1, 2003, all transactions by which
tangible personal property is or is to be stored, except
such property that the consumer holds for sale in the
regular course of business.
The purpose of this release is to provide information to
vendors and consumers to assist them in meeting their
obligations under the tax.
- What types of transactions are subject to this new tax?
Any transaction by which tangible personal property is or
is to be stored in Ohio is subject to sales tax. This
includes any holding of a consumer’s tangible personal
property for which there is a charge. An example of this
type of charge would be storage of a person’s off-season
clothing or furs in a vault. Other examples of taxable
transactions include the provision of a locker,
self-storage unit, building or other property for the
consumer’s use in storing tangible personal property, the
provision of dry dockage or out-of-water storage for
watercraft, the provision of safe deposit boxes, and the
provision of space for the consumer to keep a motor
vehicle when the transaction does not constitute
- What types of transactions are not taxable?
Transactions where the tangible personal property that is
being stored is held by the consumer for sale in the regular
course of business including raw material storage, in-process
material storage or finished goods storage, are not taxable.
Transactions whereby parking, as distinguished from storage,
for a motor vehicle is provided are not taxable under this
new language. Examples of parking transactions that would not
be taxable include parking provided as an adjunct to
residential accommodations, such as a garage for an apartment
building, and parking in a commercial lot or facility, such
as an airport parking lot or a parking garage, whether paid
on an hourly or monthly basis, and parking at parking meters.
Other examples of transactions to which the tax will not
- The in-water dockage or mooring of boats at a dock or
- The kenneling or boarding of an animal where the
transaction involves additional services such as animal care
- The provision of private mail boxes, or
- Any bailment, such as a coat check, for which no fee is
- What type of license do I need to engage in making sales
where tangible personal property is or is to be stored?
A vendor’s license is needed for each fixed location at
which such sales occur. Vendor’s licenses must be
purchased from the county auditor and cost twenty-five
dollars. The application form for a vendor’s license is
available on the Ohio Department of Taxation website:
under the tab for "FORMS."
- What rate of tax do I collect?
You will need to collect tax at the rate in effect in the
county where the property is being stored.
- The tax applies to transactions "on and after August 1,
2003. I have customers that have entered into contracts with
me prior to that date and who pay me monthly. Are these
contracts subject to the tax?
Payments for storage made before August 1, 2003 are not
taxable. Payments made on or after August 1, 2003 for
storage provided on or after that date are subject to the
tax. . For example, a late payment for storage provided
in May 2003 that is made in September 2003 is not subject
to tax. However, a payment made in August 2003 for
storage provided during that month is subject to tax.
- In addition to the fees I charge for a storage unit, I
charge my customers a refundable security deposit. I also
have fees for background checks on potential users of my
storage space, and lock cutting fees. Are these charges
No. These charges are not charges for storing, or
providing space to store, tangible personal property.
However, any portion of a refundable security deposit
that is not refunded is subject to the tax.
- A transaction where property the consumer holds for sale
in the normal course of business is not taxable. How will I
know what the consumer is storing?
If a consumer is storing exempt items such as raw
materials, in-process goods or sales inventory, the
customer needs to provide the vendor with a completed
exemption certificate. Exemption certificate forms are
available on the Department’s website. The vendor must
retain the exemption certificate in its records in case
of audit. If a customer has provided a properly completed
exemption certificate, the vendor is relieved of
liability for collecting the sales tax.
- I provide coin-operated storage lockers. Are these
transactions taxable? If so, how do I report tax on these
The transactions are taxable. Since it would be
impossible to separately charge tax on each transaction,
the sales can only be made on a "tax included" basis. A
vendor that makes this type of sale should either apply
for a pre-determined reporting agreement as provided in
R.C. 5739.05(B) or employ the alternate tax reporting
method authorized in Ohio Adm. Code Rule 5703-9-05(F).
- I rent safe deposit boxes. While I have no knowledge of
what any individual customer keeps in a safe deposit box,
many people use such boxes to keep coins, currency, bonds or
stock certificates. In these cases, are the safe deposit
boxes used for storing "tangible personal property"?
Evidences of an investment, such as stock certificates or
bonds, are tangible items. The storage of those items is
storage of tangible personal property. Currency or coins
being held as collectables or investments are tangible
personal property. Therefore, the provision of a safe
deposit box for keeping these items, or any other items
of tangible personal property, is a taxable transaction.
- I have a garage that I rent out. Am I required to collect
sales tax on the rent payments?
If the garage were being rented for the renter’s use in
parking a motor vehicle, this would not be taxable. The
fact that other items might be incidentally stored in the
garage would not make the transaction a taxable provision
of storage space.
- I own a building that I lease to business tenants. Some
of my lessees may store items in the building. Am I required
to collect tax?
Space that is rented out for the consumer to conduct
business, as opposed to the provision of storage, is not
- I provide storage of business records, which are in paper
form or on some other storage medium. Is this a taxable
Yes. The statute provides no exemption for the storage of
records. However, the electronic storage of data is not
subject to tax as storage if the consumer has continuous
access to that data via a computer. However, such
electronic storage of records may be taxable pursuant to
R.C. 5739.01(Y) if used by business to provide automatic
data processing or electronic information services.
- I operate a server on which I host my clients’ software
or websites. Are these taxable transactions?
These would not be taxable as the provision of storage.
However, some of these transactions might be taxable as
the provision of automatic data processing or electronic
information service as defined in R.C. 5739.01(Y).
- I rent post office boxes to my customers. Is this a
No. A post office box is used to receive mail, not store
tangible personal property.
- I rent apartments. In addition to renting the apartment,
I offer my tenants the opportunity to lease a storage unit in
the building for a separate fee. I also have carports that
the tenants can rent for a separate fee. Are these fees
The fee for the storage unit would be taxable. The fee
for the carport would normally be the provision of
parking, which would not be taxable.
- I rent apartments to college students. At the end of the
school year, I offer my tenants the opportunity to leave
their belongings in the apartment for a reduced monthly rent
until school resumes. Is this taxable?
If the renters do not have the right to occupy the
apartment during the period school is not in session, but
are only allowed to leave their belongings, you are
providing storage and tax should be charged.
- My company provides service to college students. At the
end of a school year, my company will pick up boxed goods and
either ship them home to the student or store the boxes for
the student until the next school year. The student is billed
a per box fee for pick-up, storage and/or delivery. Are these
Transactions where goods are picked up and shipped to the
student would not be the provision of storage and would
not be taxable. However, transactions where the company
holds the boxes and delivers them to the students when
they return to school would be taxable storage
transactions. The full charge for that service would be
- I am a dry cleaner. I offer my customers a service of
storing off-season clothing. The customers place their
clothing in a box. I pick up the box and keep it until the
customer will need it again. At that time, I have the
clothing cleaned and return it to the customer. Is this
Yes. Both elements of the transaction are taxable. The
storage of the clothing is a taxable provision of storage
for tangible personal property and the cleaning is a
taxable laundry and dry cleaning service.
- I operate a towing service. Under contract with a city, I
tow illegally parked motor vehicles to my lot. In order to
retrieve their vehicle, the owners pay me a fee for towing
and a storage fee based on the amount of time the vehicle was
in my lot. Are these charges taxable?
The charge for towing is taxable under R.C.
5739.01(B)(3)(t), which applies sales tax to towing
service. The storage fee is also taxable as a transaction
by which tangible personal property is stored.
- I run a city impound lot where motor vehicles are towed
for violations of traffic or parking ordinances. In addition
to any fines for the violations, owners have to pay a storage
fee to retrieve their vehicles from impound. Is that storage
Yes, unlike services provided under R.C. 5739.01(B)(3), there
is no exemption for storage provided by the state government
or any of its agencies, instrumentalities or political
If you have questions regarding any matter covered in this
release, please call 1-888-405-4039 (Ohio Relay Service for
the Speech or Hearing Impaired