2024 Guide to State Sales Tax in Ohio

What is sales tax in Ohio?

Ohio has both a state sales tax and local sales taxes. Sales taxes can be levied by counties and transportation districts. Because of that, the sales tax rate for Ohio will vary depending on the municipality or district where you’re making a purchase.

The total Ohio sales tax rate is made up of a state rate and local rates:

• A Ohio base state sales tax rate of 5.75%
• Local Ohio sales tax rates that varies by locality but is capped at 2.25%

That means that the total sales tax rate for Ohio is capped at 8%. That sales tax rate, however, doesn’t apply to all purchases in Ohio as there are exemptions to sales tax and lower Ohio sales tax rates on certain kinds of purchases.

See the Ohio Department of Taxation website for more information about local and state rates or use the Ohio sales tax rate map to find the local tax rate in specific localities.

What is the Ohio food tax?

Technically, there is no Ohio food tax since most food and grocery purchases are tax-exempt in Ohio. This exemption is broad and covers things like:

• Food and ingredients
• Bottle, unsweetened water
• Ice (only if sold at grocery or convenience stores)
• Fruit or vegetable juice with at least 50% fruit or vegetable content
• Gum and breath mints
• Sweetened drinks that contain milk, a milk product, or milk substitute
• Prepared food that’s not consumed on the premises
• Food from a drive through restaurant
• Coffee and tea with milk or milk supplement
• Coffee or tea plain

The Ohio food tax exemption doesn’t cover a number of items including:

• Alcohol
• Soft drinks
• Fruit or vegetable juice with less than 50% fruit or vegetable content
• Coffee or tea without milk or milk substitute
• Food consumed on the premises

Learn more about food tax in Ohio, including more details about what qualifies and what doesn’t for the Ohio food tax exemption so you charge the correct sales tax rate.

What is the restaurant tax in Ohio?

The Ohio restaurant tax can get confusing since some restaurant food is taxed and some isn’t. The rule of thumb is for restaurant tax in Ohio is as follows:

• Food consumed on the premises is taxable
• Food that isn’t consumed on the premises (e.g. drive through food) isn’t taxable so long as it meets all the requirements of the Ohio food tax exemption.

Learn more about the Ohio restaurant tax on Ohio’s webpage for the food service industry.

What counts as taxable items in Ohio?

Ohio charges sales tax on any transaction where tangible personal property or services are transferred. However, the state has a number of sales tax exemptions.

Here are a few examples of items subject to sales tax in Ohio:

• Tangible personal property, unless an exemption applies
• Clothing
• Certain services
• Some digital goods
• Food for consumption on premise
• Software as a Service (SaaS), unless exempted

Learn more about what items are taxable goods and which SaaS services are taxable in Ohio.

Selling online in Ohio?

Find Ohio nexus rules confusing? Or maybe you’re afraid you’ll miss the moment you achieve Ohio sales tax nexus?

TaxCloud can help your business remain sales tax compliant in Ohio and keep track of all your Ohio sales tax data. We can track your Ohio sales tax nexus for you once you need to collect taxes in the state, automatically collect sales tax at every transaction at the correct Ohio tax rates, keep all your Ohio sales tax information in one centralized place when you sell across multiple platforms, and file your Ohio sales taxes for you.

Contact us to get started.

What are non-taxable items or sales tax exemptions in Ohio?

Ohio offers residents a number of sales tax exemptions to Ohio taxes. Here’s a list of some of the exemptions on state sales tax in Ohio:

• Movie screening (however, the sale or rental of movies are taxable)
• Refundable deposits on containers
• Food for human consumption
• Prescription drugs
• Sales or rentals of medical equipment
• Sales or rentals of mobility or prosthetic devices
• Newspapers
• Some services

Ohio also exempts certain types of organizations and purchases from tax (ex. People who teach can purchase computers tax exempt). There are also certain types of organizations that receive exemption certificates like nonprofits and religious organizations.

Learn more about Ohio tax exemptions.

When do I need to collect sales tax in OH?

As an ecommerce business, you might have to register to collect sales taxes in Ohio. This depends on whether your business activities cause you to achieve Ohio sales tax nexus.

There are two ways to reach Ohio nexus:

Ohio physical nexus

• Ohio nexus can be achieved through certain types of physical presence in the State of Ohio. See below for details on how your business might achieve Ohio physical nexus.

Ohio economic nexus

• Ohio economic nexus is achieved when an ecommerce out-of-state seller generates $100,000 in eligible sales or 200 transactions to Ohio customers in a calendar year in the state.

What is Ohio’s physical nexus threshold?

Ohio classifies specific types of business activities as creating physical nexus in Ohio. If you have physical nexus, you must register for Ohio sales tax and charge it on all taxable sales shipped to Ohio.

Examples of business activities that can create physical Ohio nexus include:

• Having a store, showroom, distribution center in the state
• Owning or leasing physical property in the state
• Having inventory in the state
• Having employees present in the state

Learn more about physical nexus in Ohio.

What is the Ohio economic nexus threshold?

Ecommerce businesses that generate $100,000 in total retail sales or 200 transactions in the state during the current or previous calendar year are required to collect and file Ohio use tax.

To calculate the $100,000 sales threshold, the following applies:

• Retail sales include taxable and nontaxable sales made directly by the seller.
• They also include marketplace sales, even if the marketplace collects sales tax instead o the seller.
• Retail sales do not include:
  • Wholesale sales
  • Sales for resale

Despite the fact that marketplace sales are included in calculating the threshold for Ohio sales tax registration, sellers do not have to register to collect sales tax in Ohio if all their sales are through marketplaces that collect taxes on their behalf. However, if they also sell directly, they will need to register for Ohio sales tax.

Learn more about economic nexus and Ohio sales tax registration.

How does Ohio nexus work with marketplaces?

Ohio nexus works similarly for marketplaces. Here are key factors that influence Ohio economic nexus when marketplaces are involved:

• A marketplace seller would aggregate all sales and transactions into Ohio made through all marketplace facilitators as well as any Ohio sales that they make on their own when determining whether they meet the thresholds.
• Although marketplace sales are included in the threshold calculation, a marketplace sell does not need to register in Ohio if all of its Ohio sales are made through a reporting marketplace provider.
• A marketplace facilitator must look to whether the marketplace facilitator, on its own behalf, and/or sales or transactions into Ohio it facilitates in the aggregate meet the thresholds.

What city in Ohio has the highest sales tax?

Ohio state sales tax is 5.75% and the state allows cities to add additional local taxes up to a combined rate of 8%. However, only one locality has an 8% tax rate: Cuyahoga County. The next highest county tax rate in Ohio belongs to Hamilton County at 7.8%. After that, Coshocton County and Lucas county are tied at 7.75%.

Are there Ohio sales tax holidays?

Currently, the state has one tax holiday. Ohio’s sales tax holiday takes place over a three-day period on the first Friday of August and the subsequent Saturday and Sunday. In 2024, it will take place August 2-4th, 2024. The purpose of this holiday is to give a discount on back-to-school purchases.

Ohio’s sales tax holiday includes sales tax exemptions on the following:

• Clothing under $7
• School supplies under $20
• School instructional materials under $20.

Learn more about Ohio’s sales tax holiday, including what items qualify on their website.

Is Ohio a member of the SST (Streamlined Sales Tax)?

Currently, Ohio is a full member of the Streamlined Sales Tax Governing Board (SSTGB). That means you can register, file sales tax returns, and pay via the Streamlined Sales Tax site.

How do I register for a sales tax permit in Ohio?

If you meet the physical or economic nexus requirements for Ohio, you’ll have to register for an Ohio sale and use tax license with the Ohio Department of Taxation and start filing Ohio sales tax returns.

Here are the steps for registering:

• Figure out what kind of Ohio sales tax license you need: Ohio has a number of different types of licenses including one specifically for out-of-state vendors.
• Register on the Ohio Business Gateway: This will require first creating an account on the website and then using it to register for an Ohio sales tax license.
• Register on the Streamlined Sales Tax Registration System: Since Ohio is a member of SST, you can register on their website for your Ohio sales tax license.
• You’ll have to share your company’s North American Industry Classification System (NAICS) code. Here is a list of NAICS codes.

Learn more about Ohio sales tax registration.