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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.