Ohio imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.
Procedure for accepting resale certificates. In Ohio, forms are prescribed for use as unit and blanket exemption certificates and may be duplicated as needed. As a seller you must maintain resale certificates in a separate exemption file or include them as part of a customer file. Substitute exemption certificates must contain the following information:
- identify the vendor
- reasonably apprise the tax commissioner of the exemption being claimed
- be signed and dated by the purchaser
Procedure for accepting blanket certificates. In Ohio, forms are prescribed for use as unit and blanket exemption certificates and may be duplicated as needed. Certificate holders that regularly engage in making tax-exempt purchases from you can furnish you with a certificate specifying that all tangible personal property subsequently purchased will be for the purpose shown on the certificate. This blanket certificate will relieve the burden of executing a separate certificate for each individual tax-exempt purchase. The blanket resale certificate should include the information that is included on the resale exemption certificate discussed above. In addition, it is your responsibility as a vendor to maintain resale certificates in a separate exemption file or include them as part of a customer file.
Sales and use tax liability for out-of-state mail order and catalogue retailers. You will be responsible for paying sales tax only if you have physical presence within Ohio. To determine if you have physical presence, ask yourself the following:
- Do I have retail facilities, a warehouse, or any office space in Ohio? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
- Do my employees or I enter Ohio for purposes of taking and transmitting orders from Ohio? If your employee or independent contractor goes into Ohio to take or transmit orders, your business may have physical presence in Ohio. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
- Do my delivery vehicles frequently enter Ohio for purposes of delivering property? Frequent deliveries in Ohio by your trucks will give you physical presence in Ohio.
Sales tax "bracket system." Effective January 1, 2006, Ohio no longer requires vendors and out-of-state sellers to collect Ohio sales tax according to bracket schedules. Instead, the 5.5 percent sales and use tax computations must be carried out to three decimal places and rounded to the nearest whole cent, rounding up when the digit in the third decimal place is greater than four. A vendor may elect to compute the tax due on a transaction on an item or an invoice basis.
Absorbing the tax — using a "no sales tax" advertising strategy to drum up business. In Ohio it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
Claiming refund for excess tax payments. Applications for refunds must be filed on prescribed forms to the Tax Commissioner. These refunds must be filed within four years from the date of the illegal or erroneous payment of the tax. Refunds are not available when the seller has been reimbursed by the purchaser.