Ohio Tax Guidance – Sales Tax Sourcing

Effective January 1, 2010, Ohio has made a few changes to the way sales of tangible personal property and taxable services are sourced. According to the Ohio Department of Taxation, the purpose of sourcing is to determine the location of the sale for sales tax purposes. If a sale is taxable, the sourcing of the sale will determine the appropriate jurisdiction’s tax rate for the seller to charge.

Below is guidance on the Ohio sales tax sourcing rules.

1. Ohio vendors who sell tangible personal property to Ohio consumers are required to collect sales tax based on where the order is received (origination) rather than the delivery location.  Those vendors who previously switched to destination sourcing are now required to switch back.   

Penalties will not be assessed so long as the vendors are compliant by April 1, 2010.

2. Sales of tangible personal property by out-of-state sellers to Ohio consumers will be sourced to where the consumer receives the tangible personal property. 

3. Sales of services (regardless of whether the provider is in Ohio or outside Ohio) should be sourced to the location where the consumer receives the service.

For a complete description from the Ohio Department of Taxation, please click here.

Looking for assistance with State and Local Tax Issues? Contact us at 440-449-6800 or visit our State and Local Tax Services Web page.

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