On July 21, 1969 the words “…that’s one small step for man, one giant leap for mankind…” were first uttered by Ohio native Neil Armstrong as he took man’s first steps onto the moon. Just seven years prior, John Glenn was the first American to orbit the earth in his project Mercury capsule. Nearly 30 years after Armstrong’s historic moon walk, then Ohio Senator John Glenn returned to space at age 77 to become the oldest man to venture into space.
Ohio is the 34th largest (by area), the 7th most populous, and the 10th most densely populated of the fifty United States. The name originates from the Iroquois Indian word ’ohi-yo’ meaning “good river.” Ohio is nicknamed the Buckeye State for its prevalent buckeye trees, but also from William Henry Harrison’s 1840 presidential campaign in which buckeye nuts and buckeye timber were prominently featured.
Home to such inventors as the Wright Brothers and Thomas Edison, Ohio lays claim to a number of important historical “firsts” including the automobile, traffic light, cash register, airplane, incandescent light bulb, phonograph and motion picture camera.
While the state's capital and largest city is Columbus, its geographical local is significant in that half of the enter U.S. population lives within a 500-mile radius of Columbus.
Ohio is known for its status as both a swing state and as a barometer for national elections. The state’s strategic electoral importance is further demonstrated by the fact that no less than six of Presidents of the United States have considered Ohio as their state.
Since Ohio gave America its first professional baseball team (the Cincinnati Reds), it’s also fitting that it’s also the birthplace of the first hot dog. (By the way, I just had two 'great' hot dogs from Sam's Club - $3.10 for 2 hot dogs and a coke, you can't beat a deal like that.)
About Sales Taxes and this series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series. Yes, I said (50 parts), covering sales tax issues associated with each and every state tax jurisdiction in the United States. Intuitive Accountant is publishing one of these articles essentially every Tuesday, thus the series name "Sales Tax Tuesday" over the entire year of 2015. Who knows, by the end of this year there could be sufficient changes to just start the whole series over again with updated information.
Sales tax provides critical revenue for states. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts
- The state sales tax rate is currently 5.75% but the total tax rate can be as high as 8.75% depending on local municipalities.
- The Ohio sales and use tax applies to the retail sale, lease, and rental of tangible personal property as well as the sale of selected services in Ohio.
- In transactions where sales tax was due but not collected by the vendor or seller, a use tax of equal amount is due from the customer.
- The state’s chief tax collector is the Ohio Department of Taxation.
- Sales tax is referred to in Ohio as a “trust tax,” meaning that the buyer pays the tax to the seller and “trusts” that the seller remits it to the state.
- Sales tax in Ohio is origin-based, meaning the tax rate is determined by the seller’s location. A seller in an origin-based state is required to charge the same sales tax rate for every order shipped to that state.
(Does this look confusing, or what?)
- Ohio requires any person or business making retail sales of taxable products or services to obtain a vendor’s license and collect and remit sales tax.
- Ohio is a member of Streamlined Sales Tax (SST)
- Ohio’s first-ever sales tax holiday goes into effect August, 2015.
- Filing of sales tax returns is done only electronically. Paper returns on not accepted.
Wacky Ohio Ways
The 'green' in Ohio White-stuff: In Ohio snow removal is subject to sales tax if the provider uses "any mechanical means" and makes at least $5,000 in sales of such service during the calendar year.” (The neighbor kids shoveling snow with only a shovel don't need to charge sales tax for their services.)
No Easter eggs-tras: It is illegal to display colored chickens for sale in Ohio.
Be a good sport. Professional athletes are assessed a special “jock tax” when they conduct business while in the state of Ohio.
Death becomes her. Get your makeup done in a beauty salon in Ohio and you’ll pay sales tax. But you can go to your grave knowing the mortuary touched you up tax free.
Whether you are searching for your county, special district, and city to compute sales tax, or trying to decide if you should pay special tax as a jock or a baby-blue chicken, you still need to know all the details and requirements that are specific for what your are selling and where you are selling it. Manual sales and use taxes are prone to error and can consumes hours of your time in collection, accounting and reporting for what is pass-through rather than revenue-generating activities.
Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avalara allows businesses to be fully sales tax compliant without sacrificing productivity so you won't spend time digging yourself out of the sales tax grave, and that should put a 'big smile' on your lips.