Generally, all property primarily used or consumed during the manufacturing operation is exempt from Ohio sales and use tax. Therefore, the scope of the manufacturing exemption is determined by the beginning and end of the taxpayer’s “manufacturing operation”. A manufacturing operation commences upon the commitment of raw materials, which occurs at the earliest point where:Read More
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Entities having “substantial nexus” with Ohio and more than 50% common ownership are required to file Ohio Commercial Activity Tax (“CAT”) returns as a combined taxpayer, unless an election to file as a consolidated group is made. A group may elect to file CAT returns as a consolidated taxpayer if the group has at leastRead More
In light of the Ohio Supreme Court’s decision in Funtime v. Wilkins (2004), 105 Ohio St.3d 74, the Ohio Department of Taxation (the “Department”) seems to have an increased interest in auditing golf courses for Ohio sales/use taxes. In Funtime, the Ohio Supreme Court held, in sum, that an item permanently affixed to real propertyRead More
Many contracts for the purchase of tangible personal property include a lump sum purchase price and a phrase such as “all tax included” or “includes applicable sales tax”. However, this language is not sufficient to protect a consumer from collection of unpaid sales tax by the Ohio Department of Taxation (the “Department”). The Department hasRead More
As explained in a previous post, Ohio changed its sourcing rules effective January 1. Now, intrastate sales of tangible personal property (“TPP”) are generally sourced by origin (vendor’s location where order is received), and interstate sales are sourced generally by destination (consumer’s location). More importantly, incremental use tax is not owed to the Ohio CountyRead More
With the addition of 85 agents to the Ohio Department of Taxation’s (the “Department”) Audit Division (representing a 32% increase), half of which are assigned to sales and use tax, audits in this area are certain to substantially increase in the coming years. As Ohio attempts to capture revenue, you should understand the process andRead More
Much attention is given to the presence of an employee or agent in a state when analyzing whether a business has nexus for sales and use tax collection purposes on its sales. This generally causes other nexus creating activities to be overlooked. One such activity is renting a warehouse or other storage space in aRead More
Like other states, Ohio’s use tax is complementary to its sales tax, with tax being imposed upon the storage, use, or consumption of tangible personal property in Ohio and the receipt of the benefit of a taxable service, to the extent sales tax has not been paid. The reality is that every Ohio resident and business operating in OhioRead More
Churches and other places of worship have had two available exemptions from Ohio real property taxes, but this may be changing. Property where public worship actually occurs is specifically exempt. However, since this public worship exemption does not encompass buildings used by churches for ancillary purposes, such as administrative offices, churches have historically been grantedRead More
As part of Ohio’s participation in the Streamline Sales/Use Tax Project, Ohio was forced to switch to destination based sourcing for sales tax purposes. Now, since the governing rules have been relaxed, Ohio will revert back to origin sourcing for most sales effective January 1, 2010. The most significant change is with respect to delivery sales (i.e., mail order,Read More
