Registering with the Ohio Department of Taxation (ODT)
One important step in starting your business is registering
for the appropriate accounts with ODT. Depending on the type
of business you are starting, multiple ODT accounts may be
needed. The accounts available are for Sales Tax, Ohio
Withholding, and Commercial Activity Tax (CAT). Below you
will find a description of each type of account and why a
business may need to register for that type of account.
If you are starting a business where you will be making sales
of tangible personal property, a vendor's license is needed.
Tangible personal property (TPP) is personal
property that can be seen, weighed, measured, felt, or
touched, or that is in any other manner perceptible to the
senses. Examples of TPP are computers, shoes, clothes,
DVD’s, just to name a few. For more information on taxable
and exempt sales, click here.
If you are starting a business that will be providing a
service, a vendor’s license may be needed. Not all services
are taxable, only certain services defined by the Ohio
Revised Code. Examples of taxable services, are landscaping
and lawn care, computer services, building maintenance &
janitorial services and private investigation, to name a few.
For more information on taxable services click here.
Once determined that a vendor’s license is needed, the next
step is to choose what type of vendor’s license you will
need. For more
information about these individual licenses, please visit our
Information for Sales Tax
Ohio Department of Taxation
Phone: (888) 405-4089
An Ohio income tax withholding account is needed by any
business that will have employees in Ohio. This account
allows an employer to withhold Ohio income taxes from the
employee’s paycheck and submit it to Ohio. Every employer
maintaining an office or transacting business in Ohio, that
pays compensation to an employee, is required to deduct and
withhold Ohio income tax from the compensation paid to the
Along with Ohio income tax withholding, employers are also
required to withhold school district, taxes and submit to Ohio
on the employee’s behalf. School district taxes are based on
the residence of the employee. Depending on their residence,
the employee may or may not live in a taxing school district.
If you need assistance determining if an employee lives in a
taxing school district please use The Finder.
Employers must register within 15 days from the date that
withholding liability begins. Registration is free. There are
three ways to register:
By paper: Complete and file Form IT 1,
Application for Registration as an Ohio Withholding Agent and
mail or fax the completed form to us. The completed form can
be faxed to us at (614) 387-2165. Form IT 1 is available at
By Internet: Register electronically through
Business Gateway; follow the instructions for ODT
Business Tax Registrations, or
By telephone: Call 1-888-405-4089; listen
for the message and then press 2 to connect with an agent.
Activity Tax (CAT)
The Commercial Activity Tax is an annual tax imposed on an
entity for the privilege of doing business in Ohio, measured
by taxable gross receipts from most business activities. Most
receipts generated in the ordinary course of business are
subject to the CAT. The CAT only applies to those gross
receipts that are sitused (sourced) to Ohio.
The CAT applies to most businesses including but not limited
to retail, wholesale, service, manufacturing and other
general businesses regardless of the type of business
organization. For example, sole proprietorships,
partnerships, LLCs, S corporations, C corporations, disregarded
entities, trusts, and all other type of associations with
taxable gross receipts of more than $150,000 in the calendar
year are subject to the CAT.
Electronic registration is available online through the
Business Gateway. The paper registration form, CAT 1, can be
downloaded at Tax Forms or requested by
Information for CAT
A use tax is similar to sales tax in its application. Use tax
is imposed when sales tax is not collected at the time the
transaction occurs. Use tax is applicable to transactions
involving the "storage, use or other consumption" of all
tangible personal property and the receipt of certain
services that are subject to sales tax. There are two types
of Use Tax: Seller's Use Tax and Consumer's Use Tax.
Is collected by out-of-state sellers making taxable sales or
services into Ohio. A business is required to get a seller,s
use tax account with Ohio if that company has nexus with
Ohio. Activities that create nexus are: regularly having
employees or other individuals operating in the state; making
regular deliveries of tangible personal property into this
state; or any other physical presence in Ohio.
Use tax is required to be paid when an individual or business
makes a purchase and the proper amount of sales tax is not
collected by the seller. A business that purchases their
office supplies tax exempt would owe use tax when they
consume those products. Use tax would be paid directly to the
State of Ohio through a consumer’s use tax account.
For additional information on use tax, click here .