Ohio Sales and Use Tax

Responsible Party Developments: Paper Involvement Sufficient to Impose Personal Liability; Independent Contractor Not Enough

In Leishman v. Testa, Ohio BTA, Dkt. No. 2013-6262 (02/03/2015), the Ohio BTA affirmed the Tax Commissioner’s determination that even an “on paper” partner is a responsible party for unpaid sales tax. The taxpayer contended that the company was being managed by another individual who independently determined the sales tax due and reported that amount... Read More

Resale Exemption – Ohio BTA Denies Resale Exemption to Non-Licensed Dealer

The Ohio BTA affirmed assessing use tax on six cars that had been purchased out of state and brought into Ohio, but subsequently shipped out. In Dotzauer v. Testa, Case Nos. 2014-2030, 2014-2076 (2/27/2015), the taxpayers testified that they were “brokers/agents,” and had no intent to “use” the vehicles in Ohio or to do business... Read More

Absence of “Magic Permanent Assignment Language” does not Preclude Leased Employee Exception

R.C. 5739.01(JJ)(3) provides an exception to otherwise taxable employment services for leased employees provided under a contract “that specifies that each employee covered under the contract is assigned to the purchaser on a permanent basis.” In A.M. Castle and Company v. Testa, Ohio BTA Case No. 2013-5851 (March 9, 2015), the taxpayer received leased employees... Read More

Restaurants Under Audit: Tips for Agreeing to Utilize a Test Check

In a previous post, we discussed the increased scrutiny quick service restaurants and others with large reported carry-out orders are facing for under collecting Ohio sales tax. These restaurants under audit must be extremely careful before allowing the Ohio Department of Taxation to conduct a test check or sample audit, as a taxpayer who enters into... Read More

Ohio Governor Vetoes Click-Through Nexus

Although included in the version passed by the Ohio General Assembly, Governor Kasich vetoed click-through nexus provisions from Ohio’s Budget Bill signed Sunday night. Similar laws have been enacted in several other states presuming sales/use tax nexus to exist if a company enters into agreements with instate “affiliates” or representatives to refer sales, including via... Read More

Ohio Sales/Use Tax: Exempt Purchases of Property Incorporated into Real Property

Generally, a contractor’s purchase of tangible personal property to be incorporated into real property is taxable. However, a contractor’s material purchases are not taxable when incorporated into: Real property under a contract with, or that is accepted for ownership by, the United States (including its agencies) or the state of Ohio or a political subdivision... Read More

Ohio Sales and Use Tax – Proper Use of Exemption Certificates by Construction Contractors

Depending on the nature of the project, contractors may claim an Ohio sales / use tax exemption on material purchases using several different exemption certificates. If installing a business fixture (i.e., permanent attachment to real property that primarily benefits the specific business operated on the premises), the contractor, acting as a retail vendor in this... Read More

Ohio Supreme Court clarifies the support needed to claim the permanent assignment exception for taxable employment services

In Bay Mechanical & Elec. Corp v. Testa, the Ohio Supreme Court recently denied an Ohio sales tax exception based upon the taxpayer’s failure to provide sufficient evidence to support the permanent assignment of the personnel at issue. The Court integrated prior decisions in clarifying the required support for claiming the exception. As an exception or exemption to... Read More

Ohio Sales and Use Tax – Agriculture Exemption

Generally, Ohio sales and use tax is not imposed upon tangible personal property used or consumed directly in agricultural activities. R.C. 5739.02(B)(42)(n). Similar to the manufacturing exemption, the following items purchased by persons engaged in farming, agriculture, horticulture or floriculture are exempt from Ohio sales / use tax: Items to be incorporated into tangible personal... Read More

Sales Tax on Employment Services… Taking a Deep Dive into the Tax Businesses Love to Hate

Leased employees often come under scrutiny during Ohio sales tax audits. While many arrangements are exempt from sales tax, businesses should be proactive in documenting the transaction to properly evidence the exemption. Click here to view the outline from the presentation by Steven A. Dimengo and Phyllis Shambaugh (Ohio Department of Taxation Legal Counsel, Sales... Read More