ST 2008-03 - Resort Area Gross Receipts Excise Tax – Issued
April 29, 2008
This release is issued to explain the Resort Area Gross
Receipts Excise Tax (RAGRET). The RAGRET is not a new tax.
The sections allowing for the imposition of this tax were
enacted by Am. Sub. H.B. 327 (120th General Assembly) and
became law effective June 30, 1993.
Section 5739.101(A) of the Ohio Revised Code (R.C.) allows a
municipal corporation or township meeting certain
requirements to declare itself a "resort area."
R.C. 5739.101(B) authorizes the municipal
corporation or township that has declared itself a resort
area to levy a gross receipts tax on receipts derived from
engaging in certain business activities within the resort
R.C. 5739.101(B) provides:
(B) For the purpose of providing revenue for its general
fund, the legislative authority of a municipal corporation
or township, in its ordinance or resolution declaring
itself a resort area under this section, may levy a tax on
the privilege of engaging in the business of either of the
(1) Making sales in the municipal corporation or township,
whether wholesale or retail, but including sales of food
only to the extent such sales are subject to the tax levied
under section 5739.02 of the Revised Code;
(2) Intrastate transportation of passengers or property
primarily to or from the municipal corporation or township
by a railroad, watercraft, or motor vehicle subject to
regulation by the public utilities commission, except not
including transportation of passengers as part of a tour or
cruise in which the passengers will stay in the municipal
corporation or township for no more than one hour.
The tax is imposed upon and shall be paid by the person
making the sales or transporting the passengers or
property. The rate of the tax shall be one-half, one, or
one and one-half per cent of the person’s gross receipts
derived from making the sales or transporting the
passengers or property to or from the municipal corporation
The RAGRET is not a sales tax.
The RAGRET cannot be separately
listed on an invoice or receipt to customers and it
collected directly from customers.
The following is intended as a guide to help taxpayers
conducting business in a resort area to better understand the
application of the RAGRET.
A) What types of business activities generate
receipts that are subject to the RAGRET? The following is not
1) All receipts from wholesale and retail sales (including
leases and rentals) generated from doing business in the
resort area are subject to the tax with the exception that
sales of food are included only to the extent that such
sales are subject to the tax levied under section 5739.02
of the Revised Code. This includes receipts generated
from doing business in the resort area by businesses that
are based on the mainland but travel to the resort area to
This would include, for example, receipts from the sale,
rental or lease of watercraft; outboard motors;
automobiles; golf carts; lawn mowers; bicycles; tractors;
foods consumed on the premises where sold; soft drinks;
beer, wine, and other forms of alcohol; prescription and
nonprescription drugs; books; video and audio tapes;
newspapers; magazines; fishing tackle; bait; gasoline; oil;
lubricants; heating fuel; souvenirs; clothes; printed
matter; art; crafts; etc;
2) Hotel and/or motel room rentals (including Bed &
Breakfasts with five or more sleeping rooms);
Note: Bed & Breakfasts with fewer than five sleeping
rooms should make separate charges for the sale of food.
The gross receipts from these food sales are subject to the
RAGRET to the extent such sales are subject to sales tax
under section 5739.02 of the Revised Code.
3) Sales of repair and installation labor when repairing or
installing items of tangible personal property (i.e. motor
vehicle and boat repairs; installing an outboard motor on a
boat; repairing televisions, radios, radars and
4) Sales of the following services in the resort area:
Automatic Data Processing, Computer Services or Electronic
Information Services, Industrial Laundry Cleaning Service;
Telecommunications Service; Private Investigation and
Security Service; Information Service (1-900 telephone
calls); Employment Service; Employment Placement Service;
Exterminating Service; Physical Fitness Facility Service
and Recreation and Sports Club Service;
5) Sales within the resort area of Landscaping and Lawn
Care Service; Building Maintenance and Janitorial Service;
and Snow Removal Service by a person having $5,000 or more
in total sale of such services made in and outside of the
resort area during the calendar year.
6) Sales of warranties, maintenance or service contracts,
or similar agreements;
7) Personal care services (unless prescribed or performed
by a physician or chiropractor), such as manicures;
pedicures; tanning; massages; skin care; application of
cosmetics; hair removal; tattooing; and body piercing.
Note: Haircuts, hair coloring or hair styling are
8) Transportation of persons or property primarily to or
from a resort area by a P.U.C.O. regulated transportation
company (e.g. train, ferry, bus service);
9) Storage of tangible personal property, other than
property held for sale by the consumer of the storage
space. Includes personal and mini self-storage
10) Satellite broadcasting service (audio and video);
11) Dry cleaning and laundry (but NOT coin operated
12) Intrastate transportation of people, by such means as
taxis, limousines, chartered buses and helicopter rides
(but NOT ambulances, public transit systems or commercial
13) vehicle towing.
B) What are some examples of business activities that
generate receipts that are not subject to the RAGRET? This
list is not all-inclusive.
1) Sales of food for consumption off the premises where
sold (i.e. carryout food sales and food sold at grocery or
convenience stores) SPECIAL NOTE:
soft drinks, alcoholic beverages, dietary supplements and
tobacco are not considered food items.
2) Improvements to real property where items are installed
into homes or business structures and/or where items
previously installed into a home or business structure are
repaired (i.e., installation of central air conditioning
units, repairs to a furnace).
3) Charter fishing trips;
4) Campsite fees;
5) Attorney, legal and medical services;
6) Dockage fees;
7) Waste disposal fees.
Note: Separate charges for the rental/lease of waste
disposal containers would be subject to the resort tax).
C) Who must register with the tax commissioner and
how is registration accomplished?
R.C. 5739.103 requires that no person shall exercise the
privilege of engaging in business in the resort area
without first registering with the tax commissioner.
All persons that make sales in the resort area whether they
have a permanent location in the resort area or not and all
persons that come into the resort area to perform a taxable
service must register for the RAGRET.
Businesses engaged in any of the taxable business
activities are required to register with the tax
commissioner by completing an application for registration
(Form RA 1). Each business location must have a separate
Businesses not engaged in any taxable business activities
may be asked to provide the tax commissioner with a signed
statement attesting to this fact. The tax
commissioner has the authority to, and may send agents to,
examine the books and records of a business.
D) How is the RAGRET reported and paid?
Upon receipt of a completed application, the Department of
Taxation will establish a resort area tax account and
assign an account number (RA??-????). During the last month
of the reporting period, a tax return, filing instructions
and a return envelope will be sent to registered
The Department has established semiannual reporting periods
January 1 through June 30 - due July 31
July 1 through December 31 - due January 31
Returns must be filed so as to be received
by the Department of Taxation on or before the due date.
Remittance should be made payable to the Ohio Treasurer of
THIS TAX MUST
BE REPORTED AND PAID SEPARATELY FROM ANY
OTHER FEDERAL, STATE OR LOCAL TAX.
E) Is there a penalty for failure to file the returns
and pay the tax due?
Yes, R.C. 5739.102 provides for penalties in certain
situations. The failure to timely file a return or to
remit the tax due subjects taxpayers to an additional
charge of up to $50.00 or 10% of the tax liability due,
whichever is greater.
Failure to remit the entire amount of tax due also subjects
taxpayers to an assessment that may include a penalty up to
15%, plus interest.
Individuals can be held personally liable for the debts of
F) Can the Resort Area Gross Receipts Excise Tax
(RAGRET) be collected from customers?
No, since this is a tax levied on the seller’s taxable
gross receipts and it is not a tax levied on the customer,
you cannot charge your customers this tax. The RAGRET
cannot be separately stated on invoices, sales receipts or
any other document given to customers as the result of a
may however incorporate the cost of the tax in the price
charged to the customers as this is an expense to the
business person much like other operating expenses and the
cost of goods sold.
G) May a refund be obtained if a taxpayer pays the
tax in error or overpays the tax actually due?
Yes, R.C. 5739.104 provides that the tax commissioner shall
refund the amount of the RAGRET erroneously paid. An
application for refund must be made within four years from
the date the tax was erroneously paid.
Questions regarding the RAGRET should be directed to the
Compliance Section of the Sales and Use Tax Division,
telephone number 1-888-405-4039.