Teens and Taxes Home Teens and Everyday Taxes Filing Your Ohio Inocome Taxes Young Entreprenurs Tax History

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Starting a Business:

FirstStop Business Connection
The 1st Stop Business Connection, a program sponsored by the Ohio Department of Development's Small Business Development Centers and the U.S. Small Business Administrations, provides free state-level information needed to get started or continue your entrepreneurial journey.


What is sales tax?
Sales tax is a "trust" tax that is to be collected by all retailers and certain service providers when they make taxable retail sales. It is called a "trust" tax because the consumer has entrusted this tax to retailers and certain service providers with the understanding that it will be reported and paid to the State of Ohio in a timely manner.


What must I do to make taxable sales in Ohio?
Every Ohio retailer (vendor) and certain service providers making taxable retail sales must obtain a vendor's license, collect the proper amount of sales tax, file tax returns with payment of tax collected, and maintain complete records of transactions.


What type of license do I need?


Vendor’s Licenses

Type of License

Cost

Description

Regular County

$25

For vendor’s with a fixed place of business. Vendors must have a separate license for each business location.

Delivery

$25

For vendors who make sales based on delivery of tangible personal property and certain services at the consumer's location. This license is often used for internet sales. This license can be used statewide.

Transient

$25

For vendors who make sales in any county in which they have no fixed place of business. This license can be used statewide. 

Service

$25

For vendors providing automatic data processing, computer services or electronic information services; taxable telecommunications service; landscaping and lawn care service; private investigation and security service; information service (1-900 telephone calls); exterminating service; building maintenance and janitorial service; employment service; employment placement service; satellite broadcasting service; and snow removal service (mechanical). This license can be used statewide. 

Seller

No fee

For vendors outside of Ohio making sales for use, storage, or consumption in Ohio.

Consumer’s Use

No fee

For purchasers who have not paid the tax to a vendor or seller. In most cases this if for out-of-state transactions.


 

How and When is Sales Tax Collected?
Vendors must charge and collect the sales tax at the rate in effect in the county where the sale is made or obtain valid documentation detailing why the sale is exempt from tax.

Tax on titled motor vehicles, off-highway motorcycles, all-purpose vehicles, personal watercraft, titled watercraft and titled outboard motors is paid to the county Clerk of Courts at the rate in effect in the purchaser's county of residence. Telecommunication services are taxed at the rate in effect in the county of the billable telephone number. Most other areas listed under services are taxed at the county rate where the service is received.

The tax applies when the sale is made, not at some future date when payment is received. For example, if a vendor makes a sale on credit in January, but the money is not received until February, the tax must be reported and paid with January's return.

Vendors must charge the tax on every sale unless the customer provides a properly completed exemption certificate or the sale is exempt by law. Tax must be paid to the state on every taxable sale, even if the price is not collected from the customer. Vendors who fail to send in collected taxes, make sales without a license, or make sales with a suspended or revoked license, are subject to assessments, fines, and criminal penalties.


What is the Tax Base?
Tax must be charged on the total price billed to the customer. This includes delivery charges, charges for set-up, assembly, installation, preparation, engraving, and all other costs that make up the total amount charged.


When do I File a Tax Return?
Vendors will receive a letter from the Department of Taxation concerning their filing schedule (monthly, semiannually, or EFT) shortly after obtaining a vendor's license. Returns must be filed when due even if no sales are made and/or no tax is due. Filing schedules are set according to the vendor's anticipated tax liability or their business activity.

The tax return must be filed and received by the Department of Taxation on or before the due date indicated on the return. Monthly returns are due on the 23rd of the month, following the reporting period of the prior month; semi-annual returns are due on Jan. 23 and July 23 for the previous six-month filing periods.


How do I File a Sales Tax Return?
All vendors, regardless of sales volume, are now required to file electronically rather than on paper. Consumers Use taxpayers have the option to file electronically. For business owners, electronic filing cuts down on paperwork and postage costs. For state government, each electronic return saves a dollar or two in processing costs, and if you think about it, the taxpayer dollars saved are really yours.


The Ohio Department of Taxation offers multiple ways to file sales or use tax returns electronically. You have three electronic options for filing: The Ohio Business Gateway, Sales & Use Tax eForms and Telefile. The following table offers a point-by-point comparison of each method so business owners can decide which one suits them best.

Filing Methods (Add link from email number 6 starting a business.)