An often over-looked and underutilized exemption from Ohio sales and use tax is the so-called “packaging exemption”. To claim this exemption, the business must engaged in one of several enterprises, including manufacturing or making retail sales. This exemption is available for packaging materials and equipment, which are defined broadly. Further, since packaging material includes anyRead More
Events & Webinars
The Ohio Tax Commissioner’s recent Final Determination upholding the Ohio Commercial Activity Tax (Ohio CAT) assessments against L.L. Bean has received much national attention lately, but for the wrong reason. L.L. Bean’s primary argument against application of the Ohio CAT is that the bright-line nexus standard in R.C. 5751.01(H)(3) violates the Commerce Clause of theRead More
Click here for a brief summary of recent Ohio sales/use tax discussions Steve is presenting as Chair of the Ohio State Bar Association Sales/Use Tax Subcommittee at the September, 2010 Ohio Bar Association Taxatoin Committee meeting. Of particular interest are the following cases: Fruedenberg. This decision highlights the broad definition of “consumer”, which includes aRead More
A drop shipment is when a vendor accepts an order from a consumer for a product it does not have in stock and directs its supplier (a manufacturer or wholesaler) to ship the product directly to the vendor’s customer. The supplier then delivers the product to the consumer via common carrier or in its ownRead More
The Ohio Department of Taxation (“Department”) recently published an Information Release concerning the Ohio sales and use tax exemption under R.C. 5739.02(B)(27) for persons licensed to conduct food service operations. Under this exemption, personal property primarily used for any of the following is exempt from tax: 1) to prepare food for human consumption, 2) toRead More
It’s no secret athletes and entertainers are attracted to no-income tax states, such as Florida, Texas and Nevada. Recently, the tax savings offered by these states was highly publicized as a motivating factor for the departure of Northeast Ohio’s brightest star. Avoiding Ohio’s combined state and local income tax rate (up to 9%) offers aRead More
You probably have been hearing a lot of news about so called “Amazon” laws being enacted to increase sales/use tax collection for Internet sales. Until recently, there have been essentially two types of these “Amazon” laws. The first presumes that a retailer has nexus with a state, requiring it to collect the state’s sales tax,Read More
Mr. Contractor: Are You Correctly Addressing Ohio Sales Tax On Your Construction Contracts? (Part I)
As the deemed consumer, a contractor must pay Ohio sales/use tax (“tax”) on its purchases of materials incorporated into real property, unless an exemption exists. The contactor’s related transaction with the property owner is characterized as a construction contract. Since tax was already paid on the contractor’s purchases, no sales tax needs to be collectedRead More
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
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
