Are You Maximizing the Ohio Sales and Use Tax Exemption for Packaging Equipment and Materials?

Ohio provides a very broad packaging exemption for retail vendors and manufacturers, among others.  Packaging material is exempt from Ohio sales and use tax if it restrains movement of the enclosed contents in more than one plane of direction.  Further, the exemption is not limited to packaging in which the product is delivered to the retail customers, but includes bulk packaging as well.  Therefore, not only are the typical cartons, boxes and cases in which the product is held exempt, but shrink wrap and pallets may also qualify for the packaging exemption, provided the shrink wrap extends over the edge of the pallet.

Packaging equipment is also exempt from Ohio sales and use tax.  This includes any property that places the product in the package or is “an integral part thereof”.  Finally, the packaging exemption has also been extended to include labels and property used to make and/or affix those labels to the product or packaging.  As sales and use tax attorneys, we can analyze your particular operation and determine the scope to which the packaging exemption applies, as well as provide advice as to how you can maximize this exemption.