Personal Care Services - July 11, 2003
Am. Sub. H.B. 95 of the 125th Ohio General
Assembly expanded the tax base for the Ohio sales tax. In
that bill, a new Revised Code ("R.C.") section
5739.01(B)(3)(q) was enacted, which includes within the
definition of a taxable "sale" all transactions by which:
On and after August 1, 2003, personal care service is or
is to be provided to an individual. As used in this
division, "personal care service" includes skin care, the
application of cosmetics, manicuring, pedicuring, hair
removal, tattooing, body piercing, tanning, massage, and
other similar services. "Personal care service" does not
include a service provided by or on the order of a
licensed physician or licensed chiropractor, or the
cutting, coloring, or styling of an individual’s hair.
Persons providing personal care service must collect and
remit Ohio sales tax on all such services provided on or
after August 1, 2003. The purpose of this release is to
provide guidance to service providers to assist them in
complying with the tax law.
- What type of license do I need as provider of personal
A provider of personal care service is required to obtain
a vendor’s license for each fixed location from which the
service is provided. A county vendor’s license must be
obtained from the county auditor of the county in which
the place of business is located. The application form
for a vendor’s license is available on the website of the
Ohio Department of Taxation: http://tax.ohio.gov/ under the "FORMS" tab.
Examples of a fixed location would be a store, office or
salon at which the services are regularly performed.
Vendors that do not have a fixed location in this state
such as vendors located outside of this state that are
providing the personal care service in this state or
persons providing services at temporary locations such as
fairs, shows or festivals, or that travel to customers’
locations to perform their services should obtain a
transient vendor’s license. Transient licenses are
obtained from the Ohio Department of Taxation and the
application form for a transient license is also
available on the Department’s website.
- What are some examples of taxable personal care services?
Taxable "personal care services" include such services
Skin care, including facials and exfoliation
The application of false eyelashes
Manicures, including the application of polish
The application of artificial nails
Hair removal by any means, including electrolysis,
plucking or the application of depilatory products
Body piercing and branding
Tattooing, including permanent and temporary tattoos
Massage, all types
Tanning, whether done using light or chemical means
- What services are not "personal care services"?
Examples of services that are not taxable "personal care
Hair cutting, coloring or styling
Application of cosmetics performed as a part of mortuary
Face painting at fairs or festivals
Any service that would otherwise be a taxable "personal
care service" when that service is performed by or on the
order of a licensed physician or chiropractor
- I provide personal care services in a beauty salon that
already has a vendor’s license. Do I need a vendor’s license?
This would depend on your relationship with the salon. If
you operate as an independent contractor and your clients
deal with and pay you directly, you should be licensed
and should collect and remit tax on your services. If you
are an employee of the salon, or if the customers make
their payments to the salon, the salon should collect and
remit the tax on its vendor’s license.
- I have a shop where I perform body piercing and I also
sell jewelry. I already have a vendor’s license to sell
jewelry. Do I need an additional license to perform personal
No. You should report the tax collected on your personal
care services on your existing vendor’s license.
- I am a massage therapist licensed by the Ohio State
Medical Board. Is my service taxable?
Yes, unless the services are being provided on the order
of a licensed physician or chiropractor. In such a case,
you should retain sufficient information in your records
to verify the exempt sales.
- I am employed by a company to provide massages to other
employees of the company? Do I need to collect tax?
An employee performing his or her duties for the employer
is not making a sale. In such a case there would be no
sales tax. However, if the service provider were an
independent contractor, and not an employee of the
company, the services would be taxable. In that case, the
service provider should collect tax on the amount it is
paid by the company for the service.
- Are tips taxable?
If a client voluntarily gives a tip or gratuity, it is
not part of the taxable price for sales tax purposes.
- What rate of tax do I collect?
For services performed at a fixed place of business, the
tax rate will be the rate in effect for that location.
For services performed under a transient license, the tax
rate will be the rate in effect where the customer
receives the service. For example, a tattoo artist that
travels to various events in Ohio would collect the tax
rate applicable on any transaction at the rate applicable
in the location where the service is provided.
- Can I claim a sales tax exemption on any of the supplies
or equipment I use in performing a personal care service?
Under Ohio law, service providers are the consumers of
all items they use in performing their services. However,
R.C. 5739.02(B)(43)(m) provides an exemption for
purchases by a service provider of tangible personal
property that the service provider permanently transfers
to the consumer as an integral part of the performance of
the service. For example:
A tattoo artist may claim exemption on the purchase of
inks that are transferred permanently to the consumer as
part of the tattoo. No exemption is allowed for purchases
of needles used to perform the tattooing.
A skin care provider may claim exemption on purchases of
lotions, creams, or cosmetics that are applied to the
consumer and are not removed as part of the service. No
exemption for items that are applied and removed, such as
masks, or for items used to apply any creams, lotions or
A provider of massage may claim exemption on the purchase
of oils or lotions applied to the consumer of the
massage. Tax must be paid on items such as massage
tables, towels, or sheets.
- Is shaving hair a taxable service?
While R.C. 5739.01(B)(3)(r) requires that tax be applied
to hair removal, the tax does not apply to the cutting,
coloring or styling of an individual’s hair. Shaving
involves the cutting of hair rather than its removal.
Therefore, shaving is not subject to the tax.
- I sold a gift certificate to a client prior to August 1,
2003. The recipient of that certificate comes in to have the
service performed after August 1. Does the tax apply?
If the certificate is for the performance of a specified
service (i.e. a certificate for a manicure or a
one-hour massage) you need not collect tax from the
recipient when that service is performed. Such
certificates sold on and after August 1, 2003 are subject
to sales tax when the certificate is sold. Any additional
amount you charge the recipient for additional services
would be taxable.
If the certificate is for a specified dollar value
(i. e. fifty dollars toward any product or
service at a salon), the certificate is treated the same
as cash. When such a certificate is used to purchase
taxable property or services, tax should be charged on
the full price of the property or service.
- Are personal care services provided by an agency of the
state of Ohio (such as a state college or university) or a
political subdivision of the state subject to tax?
No. R.C. 5739.02(B)(22) provides an exemption when these
services are provided by the State of Ohio or any of its
political subdivisions, agencies, instrumentalities,
institutions, or authorities. This exemption applies only to
the provision of services and not to any sales of tangible
personal property a personal care service provider may make.
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: 1-800-750-0750).