Ohio’s Budget Bill and Sales Tax Changes

The state of Ohio recently passed its budget bill on July 18^th, which contains several sales tax changes, including new provisions for economic nexus.  Effective August 1, 2019, remote sellers with more than $100,000 in Ohio gross receipts or 200 Ohio transactions are required to collect Ohio sales tax. Remote sellers with annual receipts of less than $1,000,000 from remote sales in the U.S. are not required to register under Ohio’s economic nexus provisions.  Ohio can now also be added to the growing list of states who have adopted marketplace facilitator legislation.  This statute requires marketplace facilitators who own or operate a marketplace where others sell their goods or services to collect Ohio sales tax if their Ohio sales are higher than $100,000 or 200 transactions annually.

The budget bill also expanded the exemption of cleaning equipment and supplies for processing equipment to include any manufacturing operation that produces food for human consumption.  Previously, the exemption was limited to the dairy industry.  The sales tax exemption on vehicles, repair services and other attached items for professional motor sport racing teams has been eliminated.

Ohio also authorized its counties to impose local sales and use taxes in increments of 0.05%.  The legislation also approved a 0.5% local tax for construction of detention facilities by non-charter counties.