Registering to Collect and Pay Sales Taxes in Ohio

If you are in the business of retail sales, leasing or renting tangible personal property, or providing certain types of taxable services in Ohio, you need to register your business with the state of Ohio to collect and remit sales taxes. Sales tax applies on all retail sales that are not specifically exempt. You can find a list of exempt sales on the Ohio Department of Taxation website under FAQ '" Sales and Use Tax: Applying the Tax.

The state sales tax rate in Ohio is 5.5% (as of 2011). Counties and transit authorities in Ohio can assess local sales taxes. You can find the local sales tax rates on the Ohio Department of Taxation website under Tax Rates & Changes.

There are different types of vendor licenses in Ohio, depending on your type of business. If you have a fixed place of business in Ohio, you need a vendor license issued by the County Auditor. Other types of vendor licenses are issued by the Ohio Department of Taxation and are valid throughout the state. These include service vendors, transient vendors, delivery vendors, and retailers outside Ohio who make sales of products for storage, use or consumption in Ohio.

There are different application forms for each type of vendor. You can download the forms from the Ohio Department of Taxation website under License & Filing Requirements. There is a $25 fee for the license, except for retailers outside Ohio. You can register your business online using the Ohio Business Gateway. Or you can apply for a vendor's license with your county auditor. You can find a Directory of County Auditors on the County Auditors' Association of Ohio website.

When your application is approved and you receive your vendor's license, you will also receive a letter from the Department of Taxation indicating when you need to file your sales tax return. This would generally be monthly, but could also be quarterly or semi-annually depending on the amount of your sales tax liability. Sales tax returns are due by the 23^rd of the month after the end of the reporting period.

You must charge sales tax on every taxable transaction at the tax rate in effect in the county in Ohio in which you make the sale, unless the customer presents an exemption certificate. You must keep complete records of your daily sales, the sales tax charged, and the exemption certificates. According to the Ohio Department of Taxation, these records must be kept for four years and must be available for inspection by the Tax Commissioner's agents.

All vendors who collect Ohio sales tax are required to file sales tax returns electronically. There are various ways to file returns and pay the tax, which you can find under Sales and Use Tax Electronic Filing.

Sources:

Directory of County Auditors, County Auditors' Association of Ohio

FAQs '" Sales and Use Tax: Applying the Tax, Ohio Department of Taxation

FAQs '" Sales and Use Tax: Information for Vendors, Ohio Department of Taxation

License & Filing Requirements, Ohio Department of Taxation

Ohio Business Gateway, Ohio Department of Taxation

Sales and Use Tax Electronic Filing, Ohio Department of Taxation