In Ohio, most sales of physical items (called tangible personal property) are subject to sales tax--unless a specific exemption applies. Only certain services are taxable, and those are clearly listed under Ohio law. If a service isn't on that list, it's generally not taxed.

Taxable Items

Clothing and Personal Care Items

• Clothing (shirts, pants, jackets, and shoes)
• Personal Care Products (shampoo, soap, toothpaste, and deodorant)
• Cosmetics and Beauty Products (makeup, skincare products, hair care items, and perfumes)
• Sports Apparel (jerseys, athletic shoes, workout clothes, and sports bras)

Electronics and Technology

• Electronics (TVs, computers, smartphones, and tablets)
• Gaming Consoles and Accessories (PlayStation, Xbox, controllers, and gaming headsets)
• Photography Equipment (cameras, lenses, tripods, and memory cards)
• Prewritten Software (whether purchased online or on physical media)
• Downloadable Content (e-books, music, and movies)
• Prepaid Telephone Calling Cards

For more detailed information, see information release ST 1999-01 - Sale and Installation of Computer Cabling.

Household Products

• Furniture (sofas, tables, chairs, and beds)
• Household Appliances (refrigerators, washing machines, microwaves, and dishwashers)
• Home Décor (curtains, rugs, wall art, and picture frames)
• Lighting Fixtures (lamps, chandeliers, ceiling fans, and light bulbs)
• Kitchenware (pots, pans, utensils, and cutlery)
• Bedding and Linens (sheets, blankets, towels, and pillowcases)
• Bathroom Accessories (shower curtains, bathmats, soap dispensers, and towel racks)
• Building and Housing Materials
• Cleaning Supplies (detergents, disinfectants, cleaning tools, and sponges)
• Gardening Supplies (plants, seeds, gardening tools, and fertilizers)
• Automotive Parts and Accessories (tires, batteries, car care products, and wiper blades)

Medical

• Non-Prescription Drugs (pain relievers, cold medicine, vitamins, and supplements)
• Non-Prescribed Medical Devices (canes, walkers, etc.)
• Other Medical Products (Band-Aids, topicals, ACE wrap, humidifiers, etc.)
• Fitness Equipment (weights, yoga mats, exercise machines, and resistance bands)

For more detailed information, see information release ST 2010-03 - Sales and Use Tax: Drugs, Durable Medical Equipment, Mobility Enhancing Equipment, and Prosthetic Devices and Health Care Item List - Appendix L. (NOTE:  The link to the Health Care Item List - Appendix L leads to the Streamlined Sales and Use Tax library of Agreement documents. Rule Appendix L, the healthcare item chart and addendum, can be found in this library.)

Office and School Supplies

• School Supplies (notebooks, pens, and backpacks)
• Office Supplies (paper, pens, printers, and staplers)
• Digital/Physical Textbooks

Food

• Food Consumed on Site (restaurant meals and catered food)
• Prepared Food and Meals (restaurant meals and catered food)
• Soft Drinks, Alcoholic Beverages, Dietary Supplements, and Tobacco Products

For more detailed information, see information releases ST 2010-01 - Sales and Use Tax: Food Service - Equipment and Supplies Used in the Food Service Industry and ST 2012-01 – Restaurants and Other Food Vendors.

Entertainment

• Toys and Games (board games, video games, action figures, and dolls)
• Art Supplies (paints, brushes, canvases, and sketchbooks)
• Craft Supplies (fabric, yarn, and scrapbooking materials)
• Hobby Supplies (model kits, puzzles, knitting supplies, and painting sets)
• Magazines and Subscriptions

Pet Supplies

• Pet Supplies (pet food, toys, leashes, grooming products, flea treatments, pet beds, grooming tools, and pet carriers)

Fitness and Sporting Goods

• Health and Wellness Products (fitness trackers, scales, massage devices, and humidifiers)
• Bicycles and Accessories (bikes, helmets, bike locks, and water bottles)
• Sporting Goods (bicycles, treadmills, golf clubs, and basketballs)
• Camping Gear (tents, sleeping bags, lanterns, and camping stoves)
• Outdoor Furniture (patio sets, grills, garden decorations, and hammocks)
• Fishing Gear (rods, reels, tackle boxes, and bait)
• Hunting Equipment (rifles, bows, camouflage clothing, and hunting knives)
• Boating Supplies (life jackets, boat covers, anchors, and paddles)
• RV and Camping Accessories (RV covers, portable grills, camping chairs, and coolers)

For more detailed information, see information release ST 2002-03 - Recreation and Sports Club Service.

Travel and Accessories

• Luggage and Travel Accessories (suitcases, backpacks, travel pillows, and luggage tags)
• Travel Accessories (travel adapters, luggage scales, neck pillows, and travel organizers)

Rental/Leasing

• Rental/Leasing of Tangible Personal Property is subject to sales tax.
  • Examples: Rental of a scissor lift, lease of a motor vehicle

For more detailed information, see information releases ST 2003-08 - Leases and Rentals and ST 1995-09 - Water Conditioning Equipment and Water Treatment Chemicals.

Items Not Taxable

Food and Beverages

• Takeout/To-Go Orders: Exempt if consumed off-site. Alcohol, soft drinks, tobacco, and dietary supplements are not exempt.
• Bottled Water: Exempt if consumed off-site. If consumed on premise, it is taxable.
• Food Stamp Purchases: Exempt.
• Student Meals: Meals served in dorms, cafeterias, or fraternity/sorority houses are exempt.
• Free Employee Meals: Exempt when provided as a job benefit.
• Refundable Bottle Deposits: Exempt.

For more detailed information, see information release ST 2012-01 – Restaurants and Other Food Vendors and Restaurant Equipment and Supply Listing.

Medical and Health

• Prescription Medicine and Supplies: Includes insulin, test strips, syringes, hospital beds, and oxygen machines.
• Home Medical Equipment: Doctor-prescribed items like wheelchairs and breathing machines.
• Prescription Glasses and Contacts: Exempt since July 1, 2019.
• Free Prescription Drugs: Exempt when provided to licensed doctors.
• Feminine Hygiene Products: Pads, tampons, and period underwear are exempt since April 1, 2020.
• Adult Diapers and Incontinence Pads: Exempt if:
  • Sold with a prescription,
  • For a Medicaid recipient diagnosed with incontinence,
  • Sold by a Medicaid provider with a valid agreement.
  • Note: A completed exemption certificate is required.

For more detailed information, see information releases ST 2024-01 – Feminine Hygiene Products, ST 2010-03 - Sales and Use Tax: Drugs, Durable Medical Equipment, Mobility Enhancing Equipment, and Prosthetic Devices, Health Care Item List - Appendix L, ST 1989-03 - Human Organs and Tissue, and OAC Rule 5703-9-62 | Physical Fitness Facilities.

Baby and Child Products

• Car Seats and Booster Seats: Exempt if they meet national safety standards.
• Cribs: Full-size and portable cribs are exempt.
• Children’s Diapers: Exempt.
• Special Creams and Wipes: Exempt if designed for children’s skin.
• Strollers: Exempt if compliant with U.S. safety standards.

For more detailed information, see information release ST 2023-01 – Sales Tax Exemption for Baby Products.

Education

• Computers for Educational Use: Exempt for certified Ohio teachers purchasing for K–12 instruction.

Employment and Business

• Occasional Sales: Garage sales and casual sales are exempt (except titled vehicles, and if occurrence is 6 or more days in a year it is taxable and a Vendor License is required).
• Cars Sold to Nonresidents: Exempt if immediately removed from Ohio.
• Warranty Fulfillment: Parts used in warranty repairs are exempt.
• Resale Items: Exempt if purchased for resale.
• Commercial Fishing Equipment: Exempt.
• Utilities: Gas, water, steam, electricity, and bulk residential water.
• Energy Facility Equipment: Certified energy-efficient or waste-to-energy systems.
• Farming Supplies: Exempt if used directly in farming.
• Egg Preparation Equipment: Exempt.
• Farm Drainage and Grain Bins: Exempt.
• Restaurant Equipment: Exempt if used to prepare or preserve food.
• Shipping Vehicles: Exempt (ships, trains, and parts).
• Packaging Materials: Exempt if used for resale.
• Construction Materials for Public/Nonprofit Use: Exempt.
• Farm and Greenhouse Building Supplies: Exempt.
• Charitable Nonprofit Construction: Exempt.
• Goods Shipped Out of Ohio: Exempt if buyer transports them out of state.
• Manufacturing Supplies and Equipment: Exempt.
• Special Direct Use Exemptions: Includes mining, farming, utilities, and publishing.
• Precious Metals for Investment: Exempt if purity standards are met:
  • Gold: .995
  • Silver: .999
  • Platinum/Palladium: .9995
• Investment metal bullion or investment coins: Any coin composed primarily (more than 50%) of gold, silver, platinum, or palladium is exempt effective October 1, 2021
• Parts Used in Services: Exempt if permanently transferred to the customer.
• Shared Private Planes: Exempt.
• Digital Jukebox Music: Exempt.

Digital and Media

• Movies for Theaters: Exempt unless for advertising.
• Digital Photos: Exempt.
• Newspapers: Exempt.

For more detailed information, see information releases ST 2003-06 - Definition of Tangible Personal Property including Prewritten Computer Software and ST 2013-01 – Direct Mail Sourcing and Definitions.

Vehicles and Transportation

• Shipping Trucks and Parts: Exempt if shipping materials for others.
• Emergency Equipment: Exempt for nonprofit use.
• Used Mobile Homes: Exempt if sold after Jan. 1, 2000.
• Electricity Providers: Exempt on tools and equipment.
• Warehousing Equipment: Exempt if used for out-of-state shipping.
• Pollution Control Equipment: Certified equipment is exempt.

Sales Tax Exempt Organizations

• Church and Charity Sales: Exempt if held less than or equal to 6 days/year (excludes titled vehicles).
• Church Purchases: Exempt.
• 501(c)(3) Nonprofits: Exempt.
• Veterans’ Organizations: Exempt.
• Animal Adoptions: Exempt for nonprofits.
• Government Purchases: Exempt for U.S., Ohio, and reciprocal state governments.
  • State of Ohio and Political Subdivisions
  • Other States and Their Subdivisions
• School Support Groups: Exempt.

For more detailed information, see information releases ST 1994-04 - Non-profit Charitable Organizations, ST 2007-03 - Sales and Use Tax: Sales by School Support Groups and Other Charitable Organizations, ST 2008-02 - Motor Vehicles - Dealer Transfers for No Consideration, and Sales or Gifts to Nonprofit Organizations, and ST 2003-01 - Direct Payment Authority Program.

Discounts, Coupons, and Trade-In Allowances

• Store Coupons: Reduce taxable amount.
• Vendor Coupons: Reduce taxable amount.
• Manufacturer Coupons: Do not reduce taxable amount.
• Manufacturer Rebates: Do not reduce taxable amount.
• Trade-In Allowances:
  • New Motor Vehicles: Tax base reduced by trade-in value.
  • Used Vehicles: No reduction.
  • Watercraft and Outboard Motors: Tax base reduced if traded through a licensed dealer.
  • Trailers Only: No reduction.
  • All Other Sales: No reduction.

For more detailed information, see information releases ST 2003-07 - Changes to the Definition of Price and ST 1995-04 - Core Charges.

Taxable Services

Repair, Installation, and Maintenance

• Repair Services: Taxable unless the item being repaired is exempt.
• Installation Services: Taxable unless the installed item is exempt.
• Car Cleaning, Waxing, Painting, or Polishing: Taxable but excludes coin-operated services.
• Pest Control: Taxable.
• Lawn Care or Landscaping: Taxable if the provider earns $5,000+ annually.
• Snow Removal: Taxable if the provider earns $5,000+ annually.
• Flooring Installation:
  • Carpet Installation: Taxable on both materials and labor.
  • Other Floor Coverings (wood, vinyl, tile): Taxable. Contractor pays tax on materials used in construction contracts
• Warranties and Maintenance Agreements (car warranties, car cleaning packages, and warranties for electronics)

For more detailed information, see information releases ST 2002-04 - Building Maintenance and Janitorial Services, ST 2003-02 - Landscaping, Lawn Care Services, and Snow Removal, and ST 1994-01 - Sale Installation of Carpet and Other Floor/Wall Coverings.

Cleaning Services

• Building Cleaning or Janitorial Services: Taxable if provider earns $5,000+ in a calendar year. (Once the threshold is hit, the services remain taxable. The $5,000 does not reset once reached.)
• Dry Cleaning and Laundry Services: Taxable but excludes coin-operated machines.
• Pickup and Delivery: Anything charged for pickup and delivery is included in the taxable price.
• Application of Stain Repellants/Waterproofing: Taxable, even if no laundry or dry cleaning service is provided in addition.
• Sales to Hotels for Guest Laundry: Not taxable, the hotel purchases for resale and should charge tax to the guest for the laundry service. The hotel would provide an exemption certificate for resale.
• Cleaning Done for Remediation Companies: Taxable, unless the remediation company separately itemizes the cleaning charge and provides an exemption certificate claiming resale.
• Resale Exemption: Available for starches, stain repellants, and waterproofing products that will be applied to and remain in the fabric of treated items.  Also applies to hangars, plastic bags and other materials that will be given to the customer with the cleaned items.
• Machine Equipment: Taxable, this includes all machines used to clean or press fabric items and any fluids, stain removers, soaps or other supplies that are used in the cleaning process.
• Mixed invoice: When selling taxable and nontaxable items if the invoice does not separate out the nontaxable items from the taxable, the entire invoice is subject to sales tax. If the nontaxable items are separated out from the taxable, then only the taxable items are subject to sales tax.
  • Ex: A hotel is requesting their linens to be washed, as well as a couple of guests’ clothing to be laundered.
    • $1000 charge for cleaning the hotel’s linens
    • $200 charge for cleaning the hotel guests clothing.
      • If the above is separated out, only the hotel linens would be subject to sales tax.
      • If the above items were listed as $1,200 services to hotel, the entire $1,200 would then be subject to sales tax.

For more detailed information, see information releases ST 1993-04 – Exterminating Service, ST 2002-04 - Building Maintenance and Janitorial Services, and ST 2024-03 – Automated Car Washes.

Catering Services

• On-Premises Catering: Taxable, including food, beverages, and rentals.
• Off-Premises Catering: Taxable for beverages and rentals. Food is exempt.
• Resale Exemption: Available for food, beverages, and rental items purchased for resale.
• Food Service Operation: Allows exemption for food service operations for items used to prepare/preserve food for human consumption and clean prep tools (not display items).

For more detailed information, see information releases ST 2012-01 – Restaurants and Other Food Vendors, Restaurant Equipment and Supply Listing, and ST 2010-01 - Sales and Use Tax: Food Service - Equipment and Supplies Used in the Food Service Industry.

Digital Services

• Streaming Services (e.g., Netflix, Hulu): Taxable
• Satellite TV: Taxable
• Certain Telecommunication Services: Taxable
• Bundled Digital Goods & Shipping: Taxable if not itemized
• Business Data Processing & Electronic Info Services: Taxable
• 900 Number Calls: Taxable

For more detailed information, see information release ST 2003-06 - Definition of Tangible Personal Property including Prewritten Computer Software.

Personal and Recreational Services

• Gym or Fitness Memberships: Taxable
• Recreational or Sports Clubs: Taxable
• Personal Care Services: Taxable, including facials, massages, tattoos, piercings, manicures, pedicures, tanning, cosmetic application.

For more detailed information, see information releases ST 2024-02 – Personal Care Services and OAC Rule 5703-9-62 | Physical Fitness Facilities.

Lodging and Storage

• Hotel Room Rentals: Taxable for stays under 30 days in facilities with 5+ sleeping rooms.
• Bed and Breakfasts:
  • 5+ sleeping rooms: Taxable on total charge.
  • Fewer than 5 sleeping rooms: Taxable on food unless room and food charges are separated.
• Storage Services: Taxable unless storing items for resale.

For more detailed information, see information releases ST 1995-01 - Bed and Breakfast, ST 2003-11 - H.B. 95 - Storage, and ST 1995-02 - Building Management.

Transportation Services

• Towing Services: Taxable for transporting wrecked, disabled, or illegally parked vehicles.
• Motor Vehicle Rentals: Taxable unless:
  • Dealer pays for the rental,
  • Rental is due to repair under warranty,
  • Dealer is reimbursed by the manufacturer or obligor
• In-State Passenger Transport: Taxable unless provided by public transit or commercial airlines.
• Delivery Fees: Taxable, including shipping and handling.

For more detailed information, see information release ST 2003-13 (Rev, 02/04) Towing Service.

Professional and Security Services

• Private Investigators and Security Services: Taxable

Services Not Taxable

Professional, Personal, and Insurance Services

Not taxable when any tangible item transferred is incidental and not separately charged.

Examples:

• Accounting and Legal Services
• Business Consulting (e.g., training, analysis)
• Investment and Financial Advising
• Real Estate Agencies
• Insurance Agencies
• Employment and Job Placement Services
• Brokers
• Personal Chefs
• Travel Tours and Agencies

Cable TV Companies

• Cable TV Service: Not taxable.
• Equipment Sales or Rentals: Taxable.
• Phone Services: Taxable if provided by the cable company.

For more detailed information, see information release ST 1995-03 - Cable TV Companies.

Funeral Services

• Taxable Items and Services (must be itemized and taxed):
  • Clothing, vaults, outer containers, flowers, caskets, urns
  • Limousine service (within Ohio)
  • Guest books and prayer cards
• Non-Taxable Services (should be separately stated):
  • Funeral notices, gratuities, cash advances
  • Embalming, cremation, transportation of remains
  • Use of funeral home or chapel, counseling
• Funeral Director Purchases: Must pay tax on items used in providing services.
• Cemetery Associations: Must collect tax on tangible items sold (e.g., vaults, grave markers).
• Out-of-State Shipments: Not taxable if casket and remains are shipped out-of-state.

For more detailed information, see information release ST 2006-01 - Sales and Use Tax: Funeral Transactions.

Sales Tax Exempt Organizations

• Church and Charity Sales: Exempt if held less than or equal to 6 days/year (excludes titled vehicles).
• Church Purchases: Exempt.
• 501(c)(3) Nonprofits: Exempt.
• State Headquarters of Veterans’ Organizations: Exempt.
• Animal Adoptions: Exempt for nonprofits.
• Services provided to U.S. Government Agencies
  • State of Ohio and Political Subdivisions
  • Other States and Their Subdivisions
• School Support Groups: Exempt.

For more detailed information, see information releases ST 2003-01 - Direct Payment Authority Program, ST 1999-03 - Purchases by Government Employees, and ST 2024-03 – Automated Car Washes.

Internet Services

• Business Use: Not taxable as of July 1, 2020.
• Personal Use: Not taxable.

For more detailed information, see information releases ST 2004-03 - Equipment Used Primarily in Providing Internet Services and ST 1999-04 - On-line Services and Internet Access.

Web Services

Website Creation: Not taxable when billed as a personal service.

Medical Services

• Doctor-Ordered Massage Therapy: Not taxable if prescribed by a:
  • Physician
  • Chiropractor
  • Certified Nurse Midwife
  • Clinical Nurse Specialist
  • Certified Nurse Practitioner

Tips On Services

Voluntary Tips: Not taxable

Educational Examples

Auto Repair Service and Repair of Tangible Personal Property

There are various career paths that involve the repair and installation of tangible personal property. These career paths range from auto repair, appliance repair, lawn mower repair, and watercraft repair, just to name a few. In this section we will be taking an in depth look at how the repair and installation of tangible personal property relates to auto repair and sales tax. An Ohio tax law that affects the taxability of the repair and installation of tangible personal property is Ohio Revised Code Section 5739.01(WW).

Ohio Revised Code Section 5739.01(WW) defines “tangible personal property” as personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. Repair and installation to tangible personal property can be both subject to and exempt from sales tax. In general, repairs to tangible personal property are subject to sales tax unless the property being repaired is itself exempt from sales tax. This is also true for installation of tangible personal property.

Motor vehicles are considered tangible personal property, therefore sales tax must be charged on the total cost of the repairs. This includes the cost of parts, labor, and any other miscellaneous shop expenses that are included in the price.

A career path in auto repair may lead you in many directions. You may decide on opening your own repair shop, working for an automobile dealer or working for an automotive repair and maintenance shop to just name a few options. Depending on the nature of the business, a career in auto repair may require various licenses and registrations. Auto repairs are regulated by Ohio’s Auto Repairs and Services Law. If you have questions, contact the Ohio Attorney General’s Office at (800) 282-0515 or (614) 466-4320. Information can also be found online at www.ohioattorneygeneral.gov

Below are some examples of what parts of certain auto repairs are taxable.

Example #1: Joe has developed a leak in the radiator of his automobile. He brings his automobile to Holly Radiator Repair. Holly Radiator repairs the radiator. Joe is charged $99.95 in parts and $100.00 in labor for a subtotal of $199.95. The subtotal of $199.95 is subject to the tax.

Another aspect related to auto repair you may come into contact with is the replacement tire fee. The fee is paid by any wholesale distributor of replacement tires or by any retail dealer acquiring tires on which the fee has not been paid. The fee applies to the sale of new tires with rims of 13 inches or more designed for use on a motor vehicle and sold as replacements. Tires that are used or retreaded or tires on a new motor vehicle are not subject to the fee.

Other careers that are highly affected by the repair of tangible personal property include: appliance repair and HVAC repair. As stated above, in general, repair to tangible personal property is subject to sales tax unless the property being repaired is itself exempt from sales tax. This is also true for installation of tangible personal property.

Example #2: Joe needs to have the motor in  his automobile replaced after putting 140,000 miles on it. He brings the  automobile to his local car dealer. The dealer replaces the motor with a  brand new motor. The dealer charges Joe $4,000.00 for the motor and $1,000.00  labor to install the motor for a subtotal of $5,000.00. The subtotal of  $5,000.00 is subject to the tax.

Building Maintenance & Janitorial Service

A career in building maintenance or janitorial services falls under the Ohio Department of Taxation’s category of a “taxable service”.  Building maintenance and janitorial services include: housekeeping, office and building cleaning, window cleaning, floor waxing, etc. Keep in mind that building repairs are not considered “building maintenance and janitorial services.”

Building maintenance and janitorial service is defined in the Ohio Revised Code Section 5739.01(II) as:
"… Cleaning the interior or exterior of a building and any tangible personal property located therein or thereon, including any services incidental to such cleaning for which no separate charge is made." However, "building maintenance and janitorial service" does not include the providing of such service by a person who has less than five thousand dollars in sales of such service during the calendar year.

What kinds of activities are considered a "building maintenance and janitorial service?"

In general, this service includes washing, vacuuming, dusting, polishing, and waxing in offices, houses, and other buildings. Some examples are:

• disinfecting and deodorizing
• cleaning carpeting and upholstery
• chimney sweeping
• cleaning venetian blinds and window shades
• cleaning windows, walls, ceilings, and indoor pools
• washing and waxing floors
• sandblasting, chemically cleaning, power washing or otherwise cleaning building exteriors, including siding, roofs, chimneys, and gutters
• snow removal & sweeping dirt off parking garage decks (buildings)
• cleaning ventilating systems, including furnace and ductwork
• emptying waste baskets and picking up trash for the immediate or eventual removal from a building
• housekeeping (maid) service

Note: The term cleaning includes the removal of soil, dirt, wax, grease, or other pollutants or contaminants from exterior and interior surfaces of a building or from personal property within the building. However, the intentional removal of a permanent finishing or coating such as paint, varnish, stain, sealers, wallpaper, tile or carpet adhesives, etc., usually in preparation for refinishing the surface, is not, in and of itself, "cleaning" and is not a taxable janitorial service.

Note 1: These activities do not meet the definition of "building maintenance and janitorial service" as used in the law, because they are outside of the exterior of a building, constitute real property work, or are not restoring or attempting to restore a clean condition to a building or its contents.

Note 2: Clearing leaves and other debris from lawns is not a building maintenance and janitorial service. However, it is a taxable lawn care service. Snow removal became a taxable service on August 1, 2003.

If you will be working with hazardous or dangerous materials (such as blood or chemicals), contact the Ohio Department of Commerce’s Bureau of Occupational Safety and Health for information about maintaining a safe work environment.  They can be reached at (800) 282-1425 or (614) 644-2631. Information is also available online at http://www.com.ohio.gov/

The types of activities that are not a building maintenance and janitorial service, but may be associated with the service include:

• applying a stain repellant to carpeting
• repairing chimneys, carpeting, roofs, ceilings, walls, floors, and other forms of real property
• painting exterior and interior building surfaces
• miscellaneous maintenance (such as changing light bulbs)
• plumbing, electrical, and heating, ventilating, and air conditioning repair or maintenance; snow and ice removal from parking lots, driveways and sidewalks (see note 2)
• cleaning outdoor pools
• unclogging drains and pipes
• clearing leaves, grass, and other debris from lawns, sidewalks, patios, etc. (see note 2)
• removing unwanted articles from buildings (only in connection with the service of hauling them away)
• off-site cleaning of building contents such as draperies and venetian blinds;
• stripping wallpaper, paint, varnish, etc. off walls, floors, and ceilings.

Computer Service

A career in computer services can encompass a wide variety of different careers such as computer consulting, computer programming, computer software engineering, etc. Depending on the nature of the service, it may or may not be taxable and you may or may not need an Ohio vendor’s license.

The Ohio Revised Code Section 5739.01(Y)(1)(b) defines the meaning of “computer services” as:

Computer services means providing services consisting of specifying computer hardware configurations and evaluating technical processing characteristics, computer programming, and training of computer programmers and operators, provided in conjunction with and to support the sale, lease, or operation of taxable computer equipment or systems.

Taxable here are a wide range of services provided in conjunction with and to support the sale, lease or operation of taxable computer equipment. This relates to hardware and systems software, but not application software.

Systems software is that which controls the basic operation of the computer.

Application software is that which controls business functions or monitors processes.

Computer services are often minor pieces of more extensive consulting contracts or other, nontaxable personal or professional services (discussed below). The most common computer service is computer training. Even then, the only computer training that is taxable is that of computer programmers and operators if such training is provided in conjunction with the sale, lease, or operation of computer equipment or systems. Computer training that a new employee takes to learn how to use a database or spreadsheet would not be subject to tax since it would be training on application software and not systems software “provided in conjunction with and to support the sale, lease, or operation of taxable computer equipment or systems.”

Generally speaking, “computer consulting” is not a taxable computer service.

Example: Joe's Burger Barn has decided to expand nationwide. They contract with Expert Food Consulting to recommend the best configuration for their nationwide restaurant package. Expert provides Joe's with recommendations for the building and equipment configurations needed. This includes the type of computers and software alternatives needed to track the operation at each location. Expert does not sell any equipment. In this case, the computer consulting would be non-taxable.

Construction Contract

A construction contract is any agreement, written or oral, pursuant to which tangible personal property is or is to be transferred and incorporated into real property, as defined in section 5701.02 of the Revised Code, so as to become a part thereof without regard to whether it is new construction or an addition to or alteration of an existing building or structure.
A construction contractor is any person who performs such an agreement, whether as prime contractor or subcontractor.

Example 1: John made an agreement with Tim to install a new door in his house. Since tangible personal property is to be permanently installed into real property, this would be considered a “construction contract”.

Special Circumstances

The sale and installation of the following items is never a construction contract and such transactions are to be treated as the sale and installation of tangible personal property for sales tax purposes:

• Carpeting, including carpet padding, tack strips, adhesive, and similar materials that are integral and necessary components of a carpet installation transaction
• Agricultural land tile as defined in division (B)(5)(a) of section 5739.01 of the Revised Code
• Portable grain bins as defined in division (B)(5)(b) of section 5739.01 of the Revised Code
• Trees, shrubs, sod, seed, fertilizer, mulch, and other tangible personal property transferred as part of a landscaping and lawn care service as defined in division (DD) of section 5739.01 of the Revised Code.

A construction contractor who purchases materials or taxable services for incorporation into real property is the consumer of those materials or services and needs to pay sales or use tax on their purchase price. The construction contractor is the consumer, even if a subcontractor provides the actual labor to incorporate those materials into the real property.

Example 2: John made an agreement with Tim to have his refrigerator repaired. The refrigerator is considered tangible personal property, however it is not a permanent part of the structure. Therefore this would not be considered a construction contract. John would charge Tim sales tax on the repair or maintenance of the refrigerator.

Example 3: John made an agreement with Tim to install a new door in his house. John is the contractor who purchased the door to be installed, therefore John is the consumer of the door and responsible for paying the sales or use on the purchase price of the door. Since John is responsible for paying the sales or use tax on the door, John would not charge sales tax to Tim. John has the option of either paying the sales tax when purchasing the door or purchasing the door tax exempt and pay the use tax once the door is installed.

Contractors and their relationship with taxation

Contractors, like all other taxpayers, owe use tax on their untaxed purchases of tangible personal property used in Ohio. Contractors also owe use tax on untaxed purchases of certain taxable services provided to the contractor in Ohio. In addition, contractors have an added responsibility of paying tax on the purchases used to fulfill their real property contracts.

If a contractor is installing tangible personal property as part of a contract and that property remains tangible personal property after installation, then the contractor is not the consumer of the tangible personal property. In this situation, the contractor is selling tangible personal property and should charge sales tax unless the customer is an exempt entity or provides a fully-completed exemption certificate. The contractor may purchase the tangible personal property exempt from sales tax in this situation as a sale for resale.

Contractors and home remodelers do not collect sales tax on their work.  They do however,  pay sales tax on the supplies they purchase. Available on the Ohio Department of Taxation’s website is the form STEC CC, which is the construction contract exemption certificate. This certificate is to be presented to a vendor when making purchases that qualify as exempt. Some contractors find it’s easier to use a direct pay permit when buying taxable supplies. The direct pay permit allows them to buy the items without paying the tax at the time of purchase. All of that tax is gathered together and paid on a monthly basis. Direct pay permits are issued by a mutual written agreement between the applicant and the Ohio Department of Taxation.

Building and construction materials sold to a construction contractor for incorporation into real property outside this state are not subject to Ohio sales or use tax if the materials would be exempt from tax when sold to the contractor in the other state. The contractor’s exemption does not apply to tools, equipment, rentals of personal property, form lumber, temporary items such as fencing, lighting, etc., and any other purchases of tangible personal property or taxable services, not incorporated into real property.

Cosmetology

The cosmetology career path falls under the Ohio Department of Taxation’s category of a “personal care service”. This area can lead you to a career as a hairstylist, manicurist, makeup artist or barber, just to name a few. As with most businesses, there are various services that are and are not taxable. See below for more examples of services that are and are not taxable. Along with a Vendor’s License, you may need to be licensed with the Ohio State Board of Cosmetology. If you have questions, contact the Ohio State Board of Cosmetology at (614) 466-3834. Information and forms are also online at www.cos.ohio.gov.

The Ohio Revised Code Section 5739.01(B)(3)(o) defines “personal care service” as a transaction that includes skin care, the application of cosmetics, manicuring, pedicuring, hair removal, tattooing, body piercing, tanning, massage, and other similar services. This means that sales tax must be charged when providing these services.

Taxable "personal care services" include such services as:

• Skin care, including facials and exfoliation
• Cosmetics application
• The application of false eyelashes
• Manicures, including the application of polish
• The application of artificial nails
• Pedicures
• Hair removal by any means, including electrolysis, plucking or the application of depilatory products
• Body piercing and branding
• Tattooing, including permanent and temporary tattoos
• Massage, all types
• Tanning, whether done using light or chemical means

The definition of “personal care service” does not include a service provided by or on the order of a licensed physician or licensed chiropractor, or the cutting, coloring, or styling of an individual's hair. This means that if the service is provided due to a physician's or chiropractor's order or prescription, then sales tax would not be charged on the transaction. An example of a nontaxable transaction would be if an individual is receiving a massage which was prescribed by a physician.

Examples of services that are nontaxable "personal care services" include:

• Hair cutting, coloring or styling
• Pet grooming
• Application of cosmetics performed as a part of mortuary services
• Face painting at fairs or festivals
• Any service that would otherwise be a taxable "personal care service" when that service is performed by or on the order of a licensed physician or chiropractor

Everyday Purchases

Have you ever bought something at a store with a price tag that read $9.99 but you actually ended up paying more than $9.99? The difference is the sales tax that the seller is required to charge and then pay to the state. Many items you purchase may require that you pay sales tax.

For example, the jeans, orange soda and Blu-ray DVD are taxable.

However, the apples, potato chips and gum are not taxable. 

You may be confused about the 20 oz. orange soda.  Why is this taxable?  Read on and you'll find out the answer.

Keep this in mind when shopping as it will be necessary for you to have a little extra money on hand to cover the sales tax.

There are different sales tax rates for each county throughout Ohio. Therefore, the amount of sales tax you are charged may differ depending on where you make your purchases. Sales tax does not mean extra profits for the company.  The sales tax that you pay must be collected and then sent to the Ohio Department of Taxation.

Vendors are required to collect sales tax for many services and products.  However, some products are exempt from sales tax.  Most food items, for example, are not subject to sales tax unless they are consumed on the premises where they are purchased.

You'll notice this when you purchase food from a drive-thru. After purchasing your meal, look at your receipt.  Food items will not be taxed.  However, if you go into the restaurant and eat your meal, your food items will be taxed. Also, it does not matter if you purchase soft drinks at a drive-thru or with your meal in the restaurant. Soft drinks are not considered “food” and are therefore taxable.

“Food” is defined as substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. “Food” does not include alcoholic beverages, dietary supplements, soft drinks, or tobacco. Other food items that are not subject to sales tax (if consumed off - premises) include:

• bottled, unsweetened water
• ice (sold at grocery, convenience or similar stores)
• fruit or vegetable juice with fruit or vegetable content of more than 50%
• chewing gum and breath mints
• sweetened beverages that contain milk, a milk product or milk substitute

Food Service Industry

The career path in the food service industry falls under the Ohio Department of Taxation’s category of a “retail sale”.  This area can lead you to a career as a chef, hostess, restaurant manager, or coffee shop owner, just to name a few.  Along with a Vendor’s License issued by Ohio Department of Taxation, if you have employees you will need an Employer Withholding account, and depending upon your business you may also be required to have a Commercial Activity Tax account. 

Food Service Industry – Retail Sale – Ohio Revised Code

The Ohio Revised Code Section 5739.02 imposes sales tax “on each retail sale made in the state”.  In general, food consumed on premises (“for here” or “dine in”) is subject to sales tax paid by the customer.  Food not consumed on premises (“to go” or “take out”) is exempt from sales tax.  However, a soft drink is always taxable, no matter where the beverage is consumed. 

To properly comply with sales tax law, restaurateurs need to consider the following:

• What is considered food?
• Are certain beverages considered food?
• What is considered premises?

The Ohio Revised Code Section 5739.01(CCC)(1) defines food as follows: substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion by humans for taste or nutritional value is food.  Food does not include alcoholic beverages, dietary supplements, soft drinks, or tobacco. 

The Ohio Revised Code section 5739.01(CCC)(2)(b) defines soft drink as follows: nonalcoholic beverages that contain natural or artificial sweeteners. "Soft drinks" does not include beverages that contain milk or milk products, soy, rice, or similar milk substitutes, or that contains greater than fifty per cent vegetable or fruit juice by volume.

The Ohio Revised Code section 5739.01 (K) defines premise as follows: any real property or portion thereof upon which any person engages in selling tangible personal property at retail or making retail sales and also includes any real property or portion thereof designated for, or devoted to, use in conjunction with the business engaged in by such person.

When is the sale of food taxable?

• Food consumed on the premises is always taxable.
• Food sold for consumption off the premises is not taxable.

What beverages are considered food?

• A plain cup of coffee or tea is food.

What beverages are considered soft drinks?

• Beverages that are sweetened (naturally or artificially) OR contain 50% or less pure fruit or vegetable juice by volume.  However, if the beverage contains milk products or milk substitutes the beverage is food and is not taxable.

When are soft drinks taxable?

• No matter where consumed, soft drinks are not food and are always taxable.

Below is a chart categorizing beverages: 

Internet or Catalog Purchases

Next time you make an online purchase take a look at your receipt. Did the vendor charge you any sales tax? If not, you are responsible for remitting the use tax for the purchase. A use tax is similar to a sales tax in its purpose. Just like sales tax, use tax has exemptions- items that are not taxed.  Purchases that are properly exempt from sales tax are also exempt from use tax. Use tax must be paid on all purchases made by Ohio residents and businesses if the proper amount of sales tax has not been paid to the vendor, seller, or service provider. The use tax rate is equal to the sales tax rate in effect in the county where the property is used or the benefit of the service is received by the purchaser.

The most common situation that gives rise to a use tax liability is when an Ohio customer makes an internet purchase from an out-of-state seller. If the seller is not located in Ohio and does not have substantial nexus with Ohio, the seller is not required to collect and remit Ohio sales tax. The responsibility becomes yours as the consumer. This happens frequently where purchases are made through small vendors online.  

Many out-of-state sellers are registered with the State of Ohio for the collection and remittance of the sales tax. If your business makes regular purchases upon which the proper amount of sales or use tax is not collected by the seller, you should apply for a consumer's use tax account with the Department of Taxation and begin filing use tax returns.

If the purchases are less frequent, you can make a voluntary payment of the tax by sending a payment of the amount due to the Ohio Department of Taxation along with a description of the purchases made and the dates of purchase. A voluntary payment form VP USE is available on our Web site at Tax Forms. Use tax on purchases by an individual can also be paid on the Ohio individual income tax return.

Landscaping/ Lawn Care & Snow Removal

Education and training in landscaping, lawn care and snow removal can lead to a career in landscape architecture, groundskeeping, and tree trimming just to name a few.

Depending on what area you decide to specialize in, there may be other Ohio agencies that you will need to contact. For instance, if you are going to pursue a career in landscape architecture, you will need to be registered with the Ohio Board of Landscape Architects. If you will be selling hardy nursery stock (any vegetation that will survive the winter), you must have a dealer’s license from the Ohio Department of Agriculture Division of Plant Industry. You may also need to contact this agency for information on pesticide and fertilizer regulation, if applicable. If you have questions or would like more detailed information, please contact the Ohio Department of Agriculture at (614) 728-6270. Information is also online at https://agri.ohio.gov/divisions/plant-health.

Landscaping, Lawn Care - Ohio Revised Code

The Ohio Revised Code Section  5739.01 (DD) defines “landscaping and lawn care service” as the services of planting, seeding, sodding, removing, cutting, trimming, pruning, mulching, aerating, applying chemicals, watering, fertilizing, and providing similar services to establish, promote, or control the growth of trees, shrubs, flowers, grass, ground cover, and other flora, or otherwise maintaining a lawn or landscape grown or maintained by the owner for ornamentation or other nonagricultural purpose. However, “landscaping and lawn care service” does not include the providing of such services by a person who has less than five thousand dollars in sales of such services during the calendar year.

Ohio Revised Code Explained - Landscaping/ Lawn Care

Providing any of the services listed above would mean that you are providing a “landscaping and lawn care service”, and sales tax would be charged for providing these services.
If you are in the business of “landscaping and lawn care service,” once you reach at least $5,000 in gross sales from the service in one calendar year, you must register for a vendor's license, and collect and remit sales tax on all sales in excess of $5,000. If you do not reach $5,000 in gross sales, you are not required to charge sales tax.

Note: Gross Sales are the sum of all sales made during a specific period of time (calendar year).

Snow Removal Service - Ohio Revised Code

The Ohio Revised Code Section 5739.01(B)(3)(r) defines “snow removal service” as

 “. . . the removal of snow by any mechanized means, but does not include the providing of such service by a person that has less than five thousand dollars in sales of such service during the calendar year..”

Ohio Revised Code Explained - Snow Removal

Providing a snow removal service by any mechanized mean (e.g. truck with plow, snow blower, etc.) would be a taxable service and sales tax would be charged. If you are in the business of “snow removal service”, once you reach at least $5,000 in gross sales from the service in one calendar year, you must register for a vendor's license, and collect and remit sales tax on all sales in excess of $5,000. If you do not reach $5,000 in gross sales you are not required to charge sales tax.

Note: Gross Sales are the sum of all sales made during a specific period of time (calendar year).

Providing both “Landscaping/ Lawn Care Service” & “Snow Removal”

If you were providing these services during the last calendar year and your gross sales from each of these services were under $5,000, you do not need to register for a vendor's license and you are not required to collect and remit sales tax on your services.  However, if at some point, your sales total $5,000 on one or both of the services, you must register and collect and remit sales tax on all subsequent sales of that service, or both services as appropriate, for which the $5,000 total sales amount has been met.

Note: “Landscaping and lawn care service” and “snow removal service” are each treated separately for determining whether you must register and collect and remit sales tax to the state on your services. 

Are the following activities considered landscaping or snow removal services?

Those activities indicated as NOT being “landscaping and lawn care service” or “snow removal service” are instead sales and/or installation of tangible personal property, construction contracts, or personal/professional services. As such, they may be subject to the sales and use tax under other provisions of the law.

¹ Installing an underground sprinkling system for a golf course is taxable as a business fixture. See Section II of this Information Release for more information.

² For purposes of this Information Release finish grading refers to grading performed in order “to establish, promote, or control the growth of trees, shrubs, flowers, grass, ground cover, and other flora, or otherwise maintaining a lawn or landscape”

For more detailed information on Landscaping, Lawn Care Services, and Snow Removal, please go to the information release.

Miscellaneous Jobs

Many kids and teens take on the responsibility of earning money long before they are eligible to be hired by a formal employer. Common miscellaneous jobs that could be included in this situation would be house-sitting, dog-walking, babysitting, snow-shoveling, and yard work or lawn mowing. This list is not all inclusive, but should give you a good representation of the types of jobs that are not taxable.

A key point is that these small jobs are not to be a regularly occurring steady means of earning income. The exceptions are lawn care/snow removal and babysitting. Babysitting is never a taxable service. Lawn care/ snow removal is only taxable after $5,000 in gross sales has been reached in a one year period. The $5,000 rule only applies to snow removal by mechanical means (snow blower/plow).

Photography

A photographer or videographer business must have a vendor’s license to sell merchandise. In most cases you will need to collect sales tax on the sale of your photographs or videos. One exception is if you will be selling photographs to direct marketing vendors that will be using the photos in printing advertising material, you will then not be charging sales tax.

Providing a photography or videography service is considered a professional service, and therefore is non-taxable. A photography or videography service only includes the actual taking of the photographs or videos (e.g. sitting fee, photo shoot, studio fee, etc). A taxable transaction may occur if the photos are developed into tangible personal property.

The production of still photographs or prints, photo or video discs, motion pictures, the developing of negatives, or the mounting of transparencies in frames to create slides are all transactions subject to sales tax. Unless the sale is otherwise exempted by law, the entire charge to produce the tangible personal property (e.g. still photos, prints, motion pictures, etc) is subject to sales tax. This includes the cost of property sold, cost of materials used, labor or service cost, or any other expense.

A transaction may arise resulting in a mixed invoice, meaning that the invoice may contain both taxable and non-taxable items. The invoice can be itemized between taxable and non-taxable items. If the invoice is not itemized, the total amount of the invoice is taxable.

For example, if the photography transaction includes the transfer of tangible personal property such as prints, a CD or flash drive, the entire charge, including sitting fee, is subject to sales tax.

If you will be advertising or providing “glamour photography,” you will need to contact the Ohio State Board of Cosmetology at (614) 466-3834 for licensing information. Information is also available online at https://cos.ohio.gov/cos.ohio.gov.

If you will be developing your own photos, you will need to contact the Ohio Environmental Protection Agency (EPA) for information about the proper disposal of chemicals. The Ohio EPA can be reached at (614) 644-3020 for General Inquiries or (800) 329-7518 for the Small Business Hotline. Information is also online at epa.ohio.gov.

Remember to check local and federal laws.

Selling Your Stuff

Do you have some things you would like to sell for some extra cash? There are many ways to sell your personal items these days; whether it’s through an internet sale, an advertisement in the paper, or a yard sale, they are all considered to be the same type of transaction: a casual sale. Casual sales are not taxable transactions, as sales tax was paid on these items the first time they were purchased.

For example, if you decide to sell your old MP3 player on an online auction/shopping website then you would not need to charge the buyer any sales tax.  In this example, you are selling a personal item that you originally purchased for your personal use, therefore you are not required to charge sales tax. This would also be the case if you were selling the MP3 to a friend, neighbor, at a yard sale, etc. On the other hand, if you purchase an MP3 player at a very low price with plans of reselling it to try and make some extra money, you would need to charge sales tax. In this case, the item was not purchased for your personal use.

Towing Service

Motor vehicle towing service means the towing or conveyance of a wrecked, disabled, or illegally parked motor vehicle. See below for additional information on the tax imposed on motor vehicle towing.

I provide motor vehicle towing. What type of license do I need?

A provider of towing service in Ohio must obtain a vendor’s license for each fixed place of business where the towing service provider is located. Vendor’s licenses are available from the county auditor of the county in which the fixed place of business is located. The application form, ST 1, for a vendor’s license is available on the Ohio Department of Taxation's website at Tax Forms. Registration can also be done online from the department's website.

Providers of towing service located outside Ohio that perform towing service in Ohio need to acquire a seller's use registration from the Ohio Department of Taxation. The application form for a seller's use registration is also available on the Department of Taxation website or apply online at OH|TAX eServices.

What types of charges are included in a taxable motor vehicle towing service?

All charges which are part of, and essential to, the performance of the towing service are part of the taxable price of the service. Some examples of taxable charges associated with the provision of motor vehicle towing service include:

• Charges for digging snow from around a vehicle before towing.
• Trip charges, to the extent a taxable service is performed.
• Hook-up charges.
• Hourly charges, to the extent a taxable service is performed.
• Charges to disconnect drivetrain before towing.
• Dolly charges.
• Charges for righting overturned vehicles.
   

I transport new motor vehicles to dealers. Is this a taxable service?

No. This is merely a transportation charge. The vehicles being transported are not "wrecked, disabled, or illegally parked."

I repossess vehicles for finance companies. Occasionally, I have to tow the vehicle I am repossessing. Is this a taxable service?

No. The service being provided to the finance company is the repossession, not a towing service. Furthermore, the vehicle being towed is not necessarily "wrecked, disabled, or illegally parked." For the same reason, if the finance company contracts with a third party to repossess the vehicle, and the third party contracts with a tow operator to pick up the vehicle, that tow would not be subject to the tax, unless the vehicle is wrecked, disabled or illegally parked.

I am towing a motor vehicle from Indiana into Ohio. Is that service taxable in Ohio?

No. The taxability of towing is determined by where the service originates. A towing service provider is not required to collect Ohio tax on towing that originates in another state. However, towing that originates in Ohio and ends in another state is taxable in Ohio.

The statute applies to towing "a wrecked, disabled, or illegally parked motor vehicle." If all I do is pull a vehicle out of a ditch in which it is stuck, is that a taxable service?

Yes. Since the vehicle is stuck in the ditch, it is at least temporarily disabled.

Are charges for towing a motor vehicle that are paid by a vehicle owner to a municipality subject to tax?

No. R.C. 5739.02(B)(22) provides an exemption for sales of services provided by the State of Ohio or any of its political subdivisions.

If you provide towing services, you may need a commercial driver’s license. It depends on the size of the vehicle you will drive and the weight you will tow. Contact the Ohio Bureau of Motor Vehicles at (614) 752-7500 for more information. Information and registration forms can also be found online at bmv.ohio.gov.  You may also need to register with the Public Utilities Commission of Ohio’s (PUCO) Motor Carrier Division. Contact the division at (800) 686-7826. Information and registration forms can also be found online at www.puco.ohio.gov.

If you will tow oversize loads, you may need a special hauling permit from the Ohio Department of Transportation (ODOT). Contact ODOT’s main office at (614) 466-7170 or your ODOT District Office for more information. Permit and fee information can also be found at transportation.ohio.gov.