This archived Information Release has been superseded by a
later release. It is archived here for historical/reference
purposes ONLY. For the most current Information Releases,
please refer to the main "Information Releases - Current
ST 1993-08 - Employment Service - Issued September, 1993;
Revised October, 1993; Revised December, 2000; Revised May,
This release supersedes all previous versions of information
release ST 1993-08 addressing the specifically enumerated
taxable service of “employment service.”
The purpose of this release is to clarify the law with regard
to employment service. Employment service became a
transaction subject to sales and use tax on January 1, 1993.
Later, on July 1, 1993, changes were made in the statute as
to what is an employment service. Since that time, decisions
made by the Ohio Board of Tax Appeals and the Ohio Supreme
Court have interpreted the definition of this service. To
help you understand these developments and how they may
affect you as a potential provider or consumer of employment
service, the Department of Taxation has prepared this
information release. If after carefully reading it you have
any questions or require more specific assistance on your
responsibility as a vendor or consumer of this service,
please contact any office of the Department of Taxation.
Section 5739.01(B)(3)(k) of the Ohio Revised Code (“R.C.”)
includes within the definition of a “sale” and “selling” the
providing of employment service. Employment service is
defined in R.C. 5739.01(JJ) as:
. . . providing or supplying personnel, on a temporary or
long-term basis, to perform work or labor under the
supervision or control of another, when the personnel so
supplied receive their wages, salary, or other compensation
from the provider of the service. “Employment service” does
- Acting as a contractor or subcontractor, where the
personnel performing the work are not under the direct
control of the purchaser.
- Medical and health care services.
- Supplying personnel to a purchaser pursuant to a contract
of at least one year between the service provider and the
purchaser that specifies that each employee covered under the
contract is assigned to the purchaser on a permanent basis.
- Transactions between members of an affiliated group, as
defined in division (B)(3)(e) of this section.
A: R.C. 5739.01(JJ)(1)
“Employment service” does not include “[a]cting as a
contractor or subcontractor, where the personnel performing
the work are not under the direct control of the purchaser.”
To determine whether a transaction would qualify for this
exclusion it needs to be determined whether the consumer is
purchasing qualified personnel to work at the consumer’s
direction or whether the consumer is purchasing the
accomplishment of some specific task which the provider is
obligated to perform. The key is the true object of a
particular transaction. If the true object of the consumer is
to receive personnel to work at the consumer’s direction, the
transaction is an employment service. On the other hand, if
the true object of the consumer is to enter into a contact
for a completed task or project, it is not an employment
service. While it is true that both situations require work
or labor, the difference between them depends on the express
or implied responsibilities of the provider of the service as
typically stated in the contract. The following are examples:
Example A1: A general contractor engages various
subcontractors to complete the construction of a building.
The subcontractors are charged with the responsibility of
completing certain aspects of the project. The subcontractors
use their own crews whose performance and responsibilities
are guided by a contract to perform a specific task. The
labor of the crew is spent in completing certain phases as
required by the contract.
While the subcontractor may invoice periodically on an hourly
basis, it is the completion of the job that is sought and
required by the contract, not the hours of labor to
accomplish it. Since the "true object" in a construction
contract is the completed project, the transaction does not
meet the definition of employment service.
Example A2: Using the same facts as in Example A1 except that
the subcontractor does not have its own employees to
accomplish the project that it has agreed to complete. The
subcontractor obtains personnel from an employment
The relationship between the general contractor and the
subcontractor is unchanged. The transaction between these two
parties is not an employment service as stated in Example A1.
However, the transaction between the subcontractor and the
employment agency is a taxable employment service. The true
object of the subcontractor is to obtain personnel, a work
force, that will work at the subcontractor’s direction to
complete its contractual obligations to the general
Example A3: An employment agency supplies secretarial staff
as needed to its customers. The customers engage its services
seeking personnel to handle secretarial duties at its
While there may be some skill requirements to accomplish the
general secretarial duties needed, there is no responsibility
on the part of the agency to perform a specific task. The
agency’s commitment is limited to supplying personnel capable
of doing the work. The true object of the customer here is
the receipt of personnel to work as it directs. This is an
Example A4: An engineering company is engaged by a client to
prepare equipment and structural drawings which will be used
to solicit bids. The client provides general direction and
periodic constructive criticism, but does not provide any
other direction to the engineers. The engineering company’s
work is performed both on and off-site.
This transaction is not a taxable employment service. The
true object of the client and the responsibility of the
engineering company under the contract is the accomplishment
of a specific task.
Example A5: A firm specializing in providing engineering
personnel is engaged by a client to furnish it with a
qualified engineer who will work at the direction of the
client on a project or projects as needed. The engineer may
or may not work with other engineers of the client.
In contrast to Example A4, the true object of this
transaction is the receipt of a person to work as directed.
The engineering firm is supplying a professional. The person
will work under the direction of others, and the firm is not
responsible for any specific results or accomplishments. This
is an employment service. The fact that the person is a
professional has no bearing on taxability.
Example A6: A talent agency provides models and other talent
as requested for its clients. Client hires the agency to
provide models to model the client’s clothes at its
This is an employment service. The agency is providing models
who will work at the direction of the client.
Example A7: An agency provides models and other talent as
requested for its clients. Client hires the agency to provide
a specific person to perform a particular act or routine;
such as a motivational speaker.
This is not an employment service. Here the client wants a
particular performer who will perform a specific task. The
true object of the client is not to obtain individuals who
will work as it directs.
B: R.C. 5739.01(JJ)(2)
“Employment service” does not include ‘[m]edical and health
care services.” Included under this exclusion are both
professionally trained and licensed medical practitioners and
others who provide patient care to persons or otherwise have
an active role in patient diagnosis, treatment or care. For
example doctors, dentists and nurses qualify as do nurse’s
aides, x-ray technicians, medical assistants, orderlies, and
lab technicians engaged in human tissue/fluid analysis. Such
services may be performed in hospitals, clinics, doctor and
dentist offices, off-site in laboratories or wherever else
patient care is required. Other related “medical and health
care services” personnel include pharmacists dispensing drugs
for treatment, nursing home patient care staff, and in-home
care or companion personnel who are engaged to sustain the
health or well-being of individuals of diminished physical or
Not considered medical and healthcare services, even though
they may be purchased by a medical practice, are clerical,
secretarial, accounting and computer programming personnel as
well as other personnel who are not engaged in patient care.
Also included in the non-patient care category are medically
trained and licensed personnel employed to review and
administer the handling of medical insurance claims or to do
research, test or to provide other services not related to
the treatment, diagnosis or care of a particular patient. The
following are examples:
Example B1: A client of a home companion service engages the
company to supply a person to care for an ailing parent while
the client is away.
This is a medical and health care service within the
exclusion. Therefore, it is not an employment service.
Example B2: A dentist hires an employment agency to provide a
dental hygienist to fill in for a regular employee who is on
This is a medical and health care service worker who is
involved with patient care. This is not an employment
Example B3: A medical clinic hires an employment agency
specializing in providing medical personnel to provide a
trained nurse to help on a temporary basis to perform
non-patient care service such as the submission of medical
This transaction does not fit within the exclusion because,
although medically trained, the individual is not providing
care to the clinic’s patients. This is an employment service.
C: R.C. 5739.01(JJ)(3)
“Employment service” does not include “[s]upplying personnel
to a purchaser pursuant to a contract of at least one year
between the service provider and the purchaser that specifies
that each employee covered under the contract is assigned to
the purchaser on a permanent basis.” Some employee leasing
situations will fall within this category. Various examples
are discussed below. Typically, the service provider, in
exchange for reimbursement of employee wages, salaries and
benefits plus a commission, agrees to employ personnel who
conduct the business of the client. The direction of the
daily work activities of the employees are at the discretion
of the client, while payment of the employees’ wages is made
by the service provider.
For purposes of the Ohio sales and use tax, such service is
not an employment service subject to tax if the contract
between the service provider and the purchaser is for a
duration of at least one year and if the contract specifies
that each employee covered under the contract is assigned to
the purchaser on a permanent basis. Permanent basis means
that employees are intended to be assigned for an indefinite
or for an unlimited period of time. Further, the parties’
performance under the contract is subject to review. In H.R.
Options, Inc. v. Zaino 100 Ohio St.3d 373, 2004-Ohio-1, the
Ohio Supreme Court stated the following:
When the Tax Commissioner’s agents examine an employment
service contract, they must be able to determine at the time
whether an employee has been assigned on a permanent basis.
The contract, along with the facts and circumstances of the
assignment, should permit the Tax Commissioner’s agent to
Situations where the performance of the parties do not
conform to the terms of the contract may be subject to tax.
Also, if at least one employee covered under an employment
service contract is not assigned on a permanent basis, then
the entire contract may be considered taxable.
Contracts that do not provide for a term of at least one year
and/or that each employee is assigned permanently are
considered contracts for taxable employment service. The
following are examples:
Example C1: Company A is a small manufacturing company that
has outsourced its human resource functions by entering into
a written contract with an employment agency. The terms of
the contract include that all provided employees are
indefinitely assigned to Company A and that the duration of
the contract will be two years. Company A and the
professional employee organization both operate under the
contract as the terms require.
Because the contract meets the third exception to the
definition of an employment service and the parties are
operating under the contract in conformance with the terms of
the contract, this is not an employment service.
Example C2: Using the same facts as in Example C1 except that
the contract is not in writing but instead is an oral
contract. In Excel Temporaries, Inc. v. Tracy (Oct. 30,
1998), BTA No. 97-T-257, the Ohio Board of Tax Appeals
determined that an oral contract may be considered valid for
purposes of R.C. 5739.01(JJ)(3). The Board stated that:
. . . this does not mean that parol evidence may in itself be
sufficient in all cases to prove that the taxpayer’s
assignment of personnel is excluded from the definition of an
employment service. Corroborating evidence may be necessary
to establish that such contract exists and that performance
under the contract meets the requirements contained within
Accordingly, for the purpose of this example, if Company A
can provide corroborating evidence that the contract was
indeed for a period of two years and that each employee
covered by the contract is assigned to Company A on a
permanent basis, the transaction will not be an employment
service. It is strongly advised that employment service
contracts be in writing. While the Ohio Board of Tax Appeals
has determined that a contract may be oral, it has yet to
examine a factual situation where the taxpayer has been able
to prove that such contract meets the exclusion found in R.C.
Example C3: Using the same facts as in Example C1 except that
upon audit, the tax auditor finds from review of company
records that the parties are not operating according to the
terms of the contract. The employment agency has not
permanently assigned any employees to Company A, but instead
only furnishes employees to Company A based upon the
company’s needs, which fluctuate substantially from
Since the exclusion found in R.C. 5739.01(JJ)(3) is subject
to the performance of the parties, the transactions between
Company A and the service provider in this example would be
an employment service.
Example C4: Company B is a small manufacturing company with
fluctuating sales. It enters into a written contract with an
employment agency. The terms of the contract provide that the
contract is for a duration of one year and that the
employment agency will be the exclusive provider of all
employees to Company B as needed.
This situation does not meet the third exclusion because the
employees are not permanently assigned to Company B.
Accordingly, this is an employment service.
Example C5: Company AB enters into a contract with an
employment agency. The terms of the contract indicate that
the employees will be permanently assigned and the contract
is for the length of one year. Upon audit, the company
records indicate that the service provides six full time
workers under the contract that are indeed permanently
assigned as well as additional workers as needed.
In this example the contract would not fit within the third
exclusion because each worker covered by the contract is not
assigned on a permanent basis to Company AB. This is an
D: R.C. 5739.01(JJ)(4)
“Employment service” does not include “[t]ransactions between
members of an affiliated group, as defined in division
(B)(3)(e) of this section.” To qualify as a member of an
affiliated group, one person or business must own or control
the business operations of another member of the group. In
the case of corporations with stock, one corporation owns or
controls another if it owns more than fifty percent of the
other corporation’s common stock with voting rights. See R.C.
5739.01(B)(3)(e). In determining the relationships of the
parties the federal attribution rules do not apply. The
following are examples:
Example D1: Company G’s entire workforce are employees of
Company H. Company G and Company H are wholly owned
subsidiaries of the same parent corporation.
In this example the companies qualify as members of an
affiliated group and, therefore, the transactions are
specifically excluded from being an employment service.
Example D2: The Smith family is the owner of several
companies including Smith Trucking and Smith ES. Smith
Trucking is equally owned by the father and his three sons.
Smith Trucking needs qualified drivers. Seeing this need, the
three sons organize and start an employment service company,
Smith ES, which provides the drivers to Smith Trucking and
other companies on a temporary as needed basis. Smith ES does
not have a contract with Smith Trucking that would qualify
for the exclusion found in R.C. 5739.01(JJ)(3). The question
is whether transactions between Smith Trucking and Smith ES
are excluded from the definition of a taxable employment
service as the transactions are between members of an
In this example, the transactions are not excluded from the
definition of employment service because no one person or
business owns or controls the business operations of another
member of the group. Accordingly, the transactions between
Smith Trucking and Smith ES are subject to tax.
E: Additional examples related to employment service are
Example E1: Company H hires an individual to shovel snow, as
needed during the winter months, from its sidewalk for a
given hourly rate. This transaction is not an employment
service. The individual performing the work is not working
for an employer who in turn provides him to a client. The
individual is being paid directly by the purchaser of the
Example E2: Company I obtains temporary clerical, accounting,
data entry and similar personnel as needed to fill in for
vacationing employees who work under varying degrees of
supervision by a client.
This is the prime example of an employment service.
Example E3: In order to mount an air conditioning unit on a
roof, an HVAC contractor requires a crane. The crane rental
company furnishes the equipment along with an operator
necessary to complete the task. The billing from the crane
company breaks down the total cost between the crane and the
This is a nontaxable service. Despite the probability of
considerable direction of the crane operator by the
contractor and a breakdown of the crane operator’s time, the
crane rental company is not providing an employment service.
It is providing a crane service. The service it provides is
the moving, lifting and positioning of objects with its own
Example E4: A real estate broker headquartered in Cincinnati
engages an employment agency located in Cincinnati to furnish
a person to answer the telephone and provide other clerical
duties in its Covington, Kentucky branch office.
This transaction is not taxable. Although this is an
employment service, it is not subject to Ohio tax since the
job site (post-of-duty) of the temporary worker is not in
Ohio. A company in this situation is advised to keep records
that accurately identify where this type of service is
rendered to prevent future problems in the event of an
Example E5: An Ohio employment agency moves its headquarters
from Cincinnati to Covington Kentucky. The agency then
provides a temporary employee to a client in Cincinnati. The
employee’s post-of-duty is in Cincinnati, Ohio.
This is a taxable employment service. As in the previous
example, the location of the employment agency is irrelevant
to the taxability of the service being rendered. The agency
clearly has “substantial nexus” with the State of Ohio. Since
an employee of the agency is providing the company’s service
in Ohio, substantial nexus exists with Ohio. The Kentucky
agency must register as a seller with Ohio and it must
collect and remit the tax on all taxable sales located in
Example E6: Company J has several small offices throughout
the country and outsources all of its personnel from an
employment agency. Company J does not have a contract with
the employment service agency that qualifies for the
exclusion found in R.C. 5739.01(JJ)(3). The temporary
employees are located in various states throughout the
Although the entire transaction is an employment service,
only those employees with an Ohio post-of-duty would be
subject to tax in Ohio.
Example E7: Company K is a trucking operation. It contracts
with Company L to provide drivers as needed. Company K
schedules each driver’s vehicle, load, and return trip
assignments and pays Company L for the supplying of the
drivers. Company L pays the drivers’ wages.
In this situation Company L is providing an employment
service. It should also be noted that the exemption Company K
may have for “highway transportation for hire,” R.C.
5739.02(B)(32), applies to transportation equipment and its
repair, not to employment service.
Using the same facts, but adding the fact that Company L is
providing drivers pursuant to a contract of at least one year
that specifies that each employee under the contract is
assigned on a permanent basis; subject to actual performance,
this transaction is not an employment service.
Example E8: A nonprofit charitable purpose organization needs
additional clerical personnel to help with a fundraising
event. It contracts with an employment agency to provide the
Although this is an employment service, the nonprofit
charitable organization may claim exemption from the tax
under R.C. 5739.02(B)(12). The employment agency must obtain
a certificate of exemption as provided for in R.C.
Example E9: Company M is a manufacturer that desires to
outsource all of its human resource needs. It contracts with
an employment agency that places Company M’s current
personnel on its roll of employees.
The employees are then assigned back to Company M. Because
Company M is unsure of how this arrangement will workout, the
contract runs from month-to-month. The exclusion found in
R.C. 5739.01(JJ)(3) does not apply because the contract is
not for at least one year.
This is an employment service. The fact that the employment
agency did not find and hire the personnel but instead
received personnel referred to it from its client does not
change the fact that the transaction is an employment
Example E10: Company N is a manufacturer purchasing
employment service from employment agency C. Agency C will
provide personnel to Company N as needed. The personnel work
on Company N’s assembly line putting together the items that
Company N manufactures for sale.
The transactions are taxable employment service. Company N
may not claim the resale exception. In this situation, the
actual benefit that Company N receives is the benefit of the
employment service; that is, the employees’ contribution of a
temporary and flexible work force. Company N is using the
employment service in the making of its finished product
along with the materials and everything else that goes into
making the product.
Neither can Company N claim the manufacturing exemption. The
exemption in R.C. 5739.02(B)(42)(g) applies to the “thing”
transferred. A “thing” for purposes of R.C. 5739.02(B)(42)
includes only those enumerated services listed in R.C.
5739.01(B)(3)(a), (b) and (e). The section defining
employment service as taxable is R.C. 5739.01(B)(3)(k).
Accordingly, employment service is not included within the
definition of a “thing” and cannot qualify for the
manufacturing exemption. This answer is consistent with the
holding of the Ohio Supreme Court in Bellemar Parts
Industries, Inc. v. Tracy, 88 Ohio St.3d 351, 2000-Ohio-343.
Example E11: Company O routinely hires new employees as
needed to fill positions in its company. Company O however
does not want to make a commitment on the hiring of any new
employee until such time as it is convinced of the
suitability of the individual. Company O contracts with
employment agency D to provide employees as needed on a
temporary basis to fill these positions. If after a three
month trial period, Company O likes the individual, it will
hire the individual as a regular employee. If Company O does
not feel the individual is suitable, it will have the
employment agency D provide another temporary to try to fill
the position. During the trial period, the temporary is paid
by employment agency D, who in turn charges Company O for
supplying the employee.
This is an employment service and the service provider should
charge tax to Company O on the transactions during the trial
period. Further, if Company O pays the service provider an
additional fee when it hires an individual as a regular
employee, such charge is a taxable employment placement fee
under R.C. 5739.01(B)(3)(l).
Note that given the facts in this example, it is irrelevant
as to whether the terms of the contract between Company O and
the employment agency meet the exclusion to the definition of
employment service found in R.C. 5739.01(JJ)(3). This is
because the Ohio Supreme Court has held that “permanent” in
the context of R.C. 5739.01(JJ)(3) means assigning an
employee to a position for an indefinite period. See H. R.
Options, supra. In the situation found in the current
example, the employee will be assigned only for the trial
period. After the trial period the employee will either be
hired by Company O or will be removed from the position and
subject to reassignment by the employment agency. In these
facts there is no “permanent” or indefinite assignment and
the transaction cannot qualify for the exclusion to the
definition of employment service found in R.C.
Example E12: Company P is an employment agency. It contracts
with its clients to provide them with employees. All
transactions are subject to Ohio’s taxing jurisdiction. The
employees assigned will receive their daily direction from
the clients. The results of an audit find that Company P’s
contracts with its clients fall into three distinct
- Written contracts with clients that qualify on their face
for the exclusion found in R.C. 5739.01(JJ)(3), but Company
P’s records indicate that the employees are not permanently
assigned to the clients but instead are routinely shuffled
from client to client as Company P dictates;
- Written contracts with clients that qualify for the
exclusion found in R.C. 5739.01(JJ)(3) both on their face and
under a test for performance; and
- Oral contracts where clients will call in to Company P to
obtain temporary employees as needed to fill in for regular
employees who are on vacation, have called in sick that day,
who are on some other short term leave or are needed due to
an increased demand in the client’s business.
To fill many of these positions, Company P pulls from its own
employee pool. However, it also has a contract with Company
Q, an employment placement service company, who will find and
provide Company P with specific types of employees. Company P
pays a placement fee to Company Q for each employee found and
Company P adds each employee to its own employee pool. The
question is which of the three types of contracts are subject
to tax and whether Company P’s transactions with Company Q
are subject to tax.
The written contracts described under category (1) are
subject to tax. Even though a contract may on its face meet
the requirements for the exclusion found in R.C.
5739.01(JJ)(3), the terms of the contract are still subject
to review for actual performance. See H.R. Options, Inc. v.
Zaino, supra. and the explanation regarding the third
exclusion on pages 4 and 5 above. Since in this example an
audit found that the parties were not performing according to
the written terms of the contract, i.e. the employees were
not permanently assigned, these contracts do not qualify for
the exclusion found in R.C. 5739.01(JJ)(3) and the
transactions are subject to tax.
The written contracts described under category (2) qualify
for the exclusion found in R.C. 5739.01(JJ)(3) as the
specific terms meet what is required by the statutory
exclusion and a review of performance finds that the parties
are operating under the terms of the contract as they are
written, i.e. each employee covered under the contract is
assigned to the client on a permanent basis.
The situation described under category (3) is the typical
employment service situation and each transaction is subject
to tax; excluding some other exemption, e.g. the purchaser is
a nonprofit charitable purposes organization exempt from tax
under R.C. 5739.02(B)(12).
Finally, the transactions between Company P and Company Q are
taxable employment placement services, R.C. 5739.01(B)(3)(I)
and R.C. 5739.01(KK).(Footnote 3) Company P must pay tax on
the placement fees it pays to Company Q. Company P may not
claim the sale for resale exception found in R.C. 5739.01(E)
as it is not reselling the employment placement service it
received. Instead, Company P is the consumer of the service
as it received the benefit of the employment placement
service. Its benefit is the receipt of personnel that it can
add to its employee pool and use to fulfill its contractual
obligations of providing employment service to its
Example E13: Employment agency A is an out-of-state company
that has no employees located in Ohio. It desires to provide
employees to a client in Ohio. To do this it contracts with
employment agency B that is located in Ohio to provide
employees to employment agency A’s client. Agency B bills
agency A for the employees.
Pursuant to the decision of the Ohio Supreme Court in Crew 4
You, Inc. v. Wilkins, 105 Ohio St.3d 356, 2005-Ohio-2167, the
transaction between employment agency A and employment agency
B is a taxable employment service. Agency B is required to
charge and collect tax from agency A on its employment
service provided to agency A. The reason for this is because
agency B is paying the compensation to the personnel
provided. The Ohio Supreme Court stated in Crew 4 You, Inc.
that “[a] seller of ‘employment service’ as that term is used
in Ohio pays the “wages, salary, or other compensation” of
the personnel.” R.C. 5739.01(JJ).
In this example, the transaction between agency A and its
client is nontaxable service in Ohio.(Footnote 4)
Example E14: Company R contracts to have Company S provide
fifteen temporary employees to Company R. At the time,
Company S only has ten of its own employees available to
perform the contract, so Company S goes to an unrelated
employment service provider, Company T, to obtain the five
additional employees needed to fulfill its contract with
Company R. The five employees remain on the payroll of
For the ten employees of Company S that are provided to
Company R, Company S is providing an employment service.
Company T is providing a taxable employment service to
Company S. Employees are being provided to Company S to work
under Company S’s direction and control and the employees
receive their compensation from the provider, Company T.
Company S cannot claim resale on its purchase of employment
service from Company T even though it provides those
employees to Company R. That transaction is not an employment
service under the Crew 4 You case, supra., because the
employees are not receiving their compensation from Company
S, the provider of the service.
In its billing to Company R, Company S should separately
state the charges for the ten employees it is providing and
charge tax on that amount. No tax should be charged to
Company R on the separately stated amount billed for the five
employees obtained from Company T. However, if there is no
separation on the billing from Company S to Company R, tax
must be charged on the entire price of the transaction.
If you have any questions regarding this matter, you should
direct your questions to one of our taxpayer service centers
or call 1-888-405-4039.
OHIO RELAY SERVICES FOR
THE HEARING OR SPEECH IMPAIRED
1. Effective August 1, 2003 certain snow removal services
became subject to tax. See Information Release ST 2003-02 -
Landscaping, Lawn Care Services, and Snow Removal - January,
2. See also R.C. 5739.01(UU)(1)(c) which provides that
“Lease” or “rental” do not include “[p]roviding tangible
personal property along with an operator for a fixed or
indefinite period of time, if the operator is necessary for
the property to perform as designed. For purposes of this
division, the operator must do more than maintain, inspect,
or set-up the tangible personal property.”
3. See information release ST 1993-01 – Employment Placement
Service – April, 1993 for more information regarding taxable
employment placement services.
4. Due to the potential for the manipulation of employment
service agreements between affiliated companies and their
customers, such transactions will be closely scrutinized by
the Ohio Department of Taxation under R.C. 5703.56 for
possible sham transactions.