Information Release

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ST 2007-01 - Sales and Use Tax: Delay in Sourcing of Delivery Sales – Issued February, 2007 

The purpose of this information release is to notify vendors in Ohio that the Tax Commissioner has determined that a journal entry will not be issued to certify that there are certified service provider services being provided by the Streamlined Sales Tax Governing Board for all delivery sales made by Ohio vendors.(1) Therefore, most Ohio vendors(2) whose delivery sales totaled less than $30 million dollars in calendar year 2005 do not have to switch to destination sourcing on May 1, 2007.  Instead, such vendors may continue to source their sales according to R.C. 5739.035 (generally origin-based sourcing) throughout 2007.  However, all vendors must switch to the destination-based sourcing principles of R.C. 5739.033 on or before January 1, 2008.

Vendors who wish to adopt the destination-based sourcing principles of R.C. 5739.033 prior to January 1, 2008 may irrevocably elect to do so at any time.  No formal notice of this election is required to be provided to this Department.  Any such change should be made at the beginning of the vendor’s reporting period.  Please note that vendors with over $30 million in delivery sales in calendar year 2005 are still required to use the destination sourcing requirements of R.C. 5739.033 (as of May 1, 2006).

Any vendor that incurs costs in its conversion to destination-based sourcing under R.C. 5739.033 is entitled to compensation under R.C. 5739.123.  For further information, please see Information Release 2005-1, titled “Vendor Compensation,” which is available on the Ohio Department of Taxation website: tax.ohio.gov.

 

If you have any questions regarding this information release, please contact Taxpayer Services at 1-888-405-4039, or e-mail us through our Web site: tax.ohio.gov.

OHIO RELAY SERVICES FOR THE
HEARING AND SPEECH IMPAIRED
Telephone: 1-800-750-0750

FOOTNOTES:

(1) R.C. 5739.033(B)(2), as adopted in Sub. H.B. 294 of the Ohio General Assembly, provides:

*** (a) A vendor with total delivery sales in calendar year 2005 that are less than thirty million dollars may continue to situs its sales under section 5739.035 of the Revised Code from May 1, 2006, through April 30, 2007, except that, if the tax commissioner does not enter a determination in the commissioner's journal under division (B)(2)(b) of this section, those dates shall be May 1, 2006, through December 31, 2007.

(b) On or before February 1, 2007, the tax commissioner shall determine whether certified service provider services are being provided by the governing board of the streamlined sales and use tax agreement for all delivery sales. If the commissioner determines that such services are being so provided, the commissioner shall enter the determination in the commissioner's journal and shall provide notice of the determination on the department of taxation's official internet web site. If the commissioner makes such an entry in the journal, then a vendor with total delivery sales in calendar year 2006 that are less than five million dollars may continue to situs its sales under section 5739.035 of the Revised Code from May 1, 2007, through December 31, 2007.

(2) As used in this information release, “vendor” excludes those vendors required to have a service or delivery license. Such vendors are already required to use destination based sourcing.