Information Release

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 area.  

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 following:

(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 or township.

The RAGRET is not a sales tax.  The RAGRET cannot be separately listed on an invoice or receipt to customers and it cannot be 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 all-inclusive.

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 make sales.

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 appliances);

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 NOT subject to RAGRET.

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 facilities;

10) Satellite broadcasting service (audio and video);

11) Dry cleaning and laundry (but NOT coin operated laundry);

12) Intrastate transportation of people, by such means as taxis, limousines, chartered buses and helicopter rides (but NOT ambulances, public transit systems or commercial airlines);

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 registration.

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 taxpayers. 

The Department has established semiannual reporting periods as follows:

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 State.


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 the corporation.

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 sale. Businesses 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.