Ohio levies a 5.75% statewide sales and use tax on the retail sale of tangible personal property along with select services. With county and transit authority taxes added on, residents of major Ohio cities can pay over 8% in total sales tax. Ohio sales tax calculator and its laws allows taxpayers to optimize major purchases while ensuring businesses comply with collection and remittance requirements.
Ohio Sales Tax Calculator
The Ohio sales tax calculator is an online tool that automatically calculates the total sales tax due for purchases made in Ohio. To use the calculator, you first select the county and city where the purchase is being made. Ohio has a statewide sales tax of 5.75%, but counties and cities can add up to an additional 2% in local sales taxes. After entering the location, you simply input the total purchase price. The calculator will then take the purchase price, multiply it by the combined state and local sales tax rate for that area, and provide the total sales tax amount owed.
Ohio Sales Tax Calculator
Ohio Sales Tax Calculator
Ohio sales tax calculator makes it easy for Ohio residents and businesses to quickly and accurately determine the sales tax on purchases, ensuring they collect and remit the correct amount of tax according to Ohio laws. The automated calculation removes the hassle of manually looking up combined tax rates and computing the tax due.
Overview of Sales Tax in Ohio
Ohio first instituted a 3% sales and use tax in 1934 which applied to sales of tangible goods and some services. Rate increases over the decades brought the current statewide rate to 5.75% as of 2018. This makes Ohio’s sales tax rate middle-of-the-pack nationally.
On top of the state tax, Ohio allows counties and regional transit authorities to assess their own local permissive sales taxes up to 3%. Combined state and local sales tax can exceed 8% in cities like Cincinnati and Cleveland.
In addition to general sales tax, Ohio levies excise taxes on motor fuel, alcohol, cigarettes, and utilities. The state also taxes casual sales of motor vehicles based on book value.
What Transactions are Taxable in Ohio?
Ohio broadly applies its 5.75% sales tax to retail sales of most tangible personal property including common purchases like:
- Clothing, footwear, and accessories
- Furniture, appliances, electronics
- Home goods and improvement supplies
- Toys, games, arts and crafts
- Prepared food from restaurants and grocery delis
- Alcohol and tobacco
- Memberships to clubs like gyms and golf courses
- Digital products including apps, ebooks, streaming services
Ohio taxes some services as well including repair and installations, motor transportation, recreation, and more. However, professional services remain exempt.
Exemptions to Sales Tax in Ohio
While extensive, Ohio provides exemptions on select goods and services: Here are the list of goods which are exempted from sales tax in Ohio
- Food – Groceries for home consumption are exempt from the general sales tax but do face local taxes.
- Prescription drugs – Sales of prescription medication and medical equipment are exempt.
- Manufacturing equipment – Machinery, tools, and supplies used directly for production are exempt.
- School textbooks – Textbooks sold by college bookstores are exempt.
- Magazines and newspapers – Print periodical subscriptions are exempt.
- Nonprofits – Qualified 501(c)(3) organizations can purchase goods for use in activities exempt from sales tax in Ohio with an ST-9 form.
Taxpayers should be aware of Ohio’s exemptions when budgeting and filing to avoid overpaying.
Who Collects and Remits Sales Tax in Ohio?
In Ohio, the obligation to properly collect, report, and remit sales tax falls on the retailers or sellers making taxable transactions. Consumers then pay this tax at the point of sale.
Both in-state and remote sellers shipping taxable goods into Ohio must collect and remit the sales tax. Following the Supreme Court’s Wayfair ruling, Ohio enacted an economic nexus standard effective 2019 requiring out-of-state sellers exceeding $100,000 in Ohio sales or 200 transactions to collect.
Marketplaces like Amazon must collect and remit Ohio tax on behalf of third-party sellers who meet Ohio’s sales thresholds through the marketplace.
How Ohio Uses Sales Tax Revenue
Ohio relies heavily on sales and use tax, which accounts for over 30% of total state tax revenue. In fiscal year 2021, Ohio collected $9.2 billion in sales and use tax. These funds support services like:
- Public education – K-12 schools, universities, and financial aid programs.
- Healthcare – Medicaid, public health initiatives, and mental health services.
- Public safety – State troopers, crime lab, corrections.
- Transportation – Maintenance and construction of highways, bridges, and public transit.
- Local governments – Tax sharing supports community services.
- General operations – State employee wages, administrative costs, buildings.
Without sales tax, Ohio would struggle to adequately fund these essential services that its residents depend on. Proper collection promotes tax fairness.
Recent and Possible Future Changes Sales Tax in Ohio
Like most states, Ohio frequently adjusts its sales tax policies and rates. Recent changes include:
- Online sales tax – Economic nexus provisions took effect in 2019 following the Supreme Court’s Wayfair decision, requiring more remote sellers to collect Ohio sales tax.
- Tax holiday – Ohio holds an annual three-day sales tax holiday in August for clothing, school supplies, and instructional materials.
- Vapor tax increase – Ohio enacted a significant tax increase on electronic cigarettes and vaping products in 2019.
- Magazine exemption – Print magazine subscriptions were exempted from sales tax effective 2019.
Future changes may include base expansion to more services, new reporting requirements, and periodic rate hikes. Ohio also scrutinizes expanding its sales tax holiday.
Sales Tax Compliance Tips for Ohio Businesses
Businesses making taxable sales into Ohio must obtain sales tax licenses and adhere to Ohio’s collection and remittance regulations including:
- Obtain a vendor’s license – Register for an account with the Ohio Department of Taxation after exceeding economic nexus thresholds. You can apply online.
- Integrate sales tax software – Solutions like AvaTax can automate rate calculations, timely filing, and payments.
- Charge all rates accurately – Ensure your POS system charges the combined state and local rates based on each customer’s delivery jurisdiction.
- Collect tax on online and mail order sales – Charge Ohio tax on any orders shipped to Ohio addresses.
- File returns on time – Ohio sales tax returns are due the 23rd of the following month. Late filings incur penalties.
- Keep detailed transaction records – Retain documents that support tax charges like shipping addresses and exemption certificates.
Proper compliance helps Ohio businesses avoid penalties and other problems down the road. Consider outsourcing to a qualified tax professional if struggling to manage it internally.
Conclusion
While not imposing the highest rates, Ohio’s broad sales tax base reaches most consumer transactions. Careful planning around exemptions and tax holidays allows taxpayers to strategically reduce costs. Meanwhile, both in-state and remote sellers must closely monitor economic nexus requirements, integrate software, and master reciprocal agreements with neighboring states to smoothly handle Ohio’s sales tax at scale. With the rise of e-commerce and evolving tax laws, sales tax in Ohio will likely continue gaining complexity in 2023 for both residents and businesses.
