Ohio Department of Taxation Aggressively Extends Electronic Information Service Tax Base

Amongst Ohio’s taxable services are electronic information services, defined in R.C. 5739.01(Y)(1)(c) as providing access to computer equipment through telecommunications to either:


  1. Examine or acquire data stored in or accessible to the computer equipment; or
  2. Placing data into computer equipment to be retrieved by designated recipients with access to the computer equipment.


In Marc Glassman, Inc. v. Levin 119 Ohio St.3d 254, 2008-Ohio-3819, we successfully persuaded the Ohio Supreme Court electronic information services does not include a service providing merely conclusive answers communicated from a third party. However, the Department of Taxation is now taking the position that a taxable service includes inventory advertising when the vendor has access to control the data within the computer equipment (i.e., Cars.com / Autotrader.com), online chat features (allowing vendors to communicate instantly with potential customers), and mass emails services where the customer can upload mailing lists. Information Release ST 1999-04 (Updated Dec. 2015). Although, we believe these services are predominately personal/professional services that are now being delivered through ancillary electronic means, the Department feels to the contrary. Caution and proper planning can minimize your tax base and avoid a substantial surprise during an Ohio use tax audit.


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