In our Local Sales Tax/Home Rule Issues blog, we discuss several states which, via "Home Rule" status permit sub-state jurisdictions to levy sales and use taxes on taxable transactions taking place within their boundaries. The one state noticeably absent from the list is Ohio. While not as challenging as some on that list, it does provide a bit of frustration as the following illustrates.
The Ohio sales tax rate you charge (or pay) will depend upon the location where the transaction takes place. Ohio sales tax starts with a statewide rate, currently at 5.75%. Each of Ohio’s 88 counties levy’s an “add-on” rate which is piggy-backed on the statewide rate. Consequently, the sales tax rate charged consists of the statewide rate plus the county add-on rate. In addition, there are 4 transit authorities in central Ohio which have sales tax levy authority. These “COTA’s” consists of portions of Delaware, Fairfield, Licking and Union counties in central Ohio. Fortunately, the tax base for each of the 88 counties and 4 transit authorities is the same as the statewide tax base, mitigating at least some frustration. test
To someone from the outside, the first question you would ask is how will I know which county I’m in, and what is the proper rate to charge? The Ohio Department of Taxation website provides a few tools that are a great help in finding the right rate.
Tax Rates and Changes:<--clicking here will take you to the Ohio Department of Taxation’s Sales Tax Rates & Changes page of the website. Here, under current rate information, you can download a map of Ohio carved out into the 88 counties with the total sales tax rate applicable to each county. There is a black and white version as well as a color version. Other information which can be found here include rate schedules, allowing the user to download tables calculating the amount of sales tax to charge based on the dollar amount of the purchase, based on county rate. The site will also provide current rate change information. For example if you access the site today, you would learn Richland County’s tax rate will increase to 7.25% on July 1, 2015.
Having the rate information is all well and good. However, you might only have the purchasers' address. If you do not know the county that addresses located in, how would you determine the right sales tax rate? Once again the Ohio Department of Taxation has a tool for that.
The Finder:<--clicking here will take you to Ohio’s Finder; an online tool that allows the user to determine, not only the sales tax rate, but also the municipal income tax rate, school district income tax rate, and a summary of all Ohio taxes by address.
Once you access the finder, click the “sales and use tax” button. There, the system will give you the option to look up by address or by the 5 or 9 digit ZIP Code. Clicking the link for the address will provide the user fields to enter address information and look up the county and rate information.
I may be biased, but I think the Finder is about the best tool out there for helping Ohio taxpayers' and businesses' properly comply with their tax responsibilities. Ohio does a good job in trying to provide the resources necessary in order to navigate Ohio's somewhat challenging tax environment. Of course I'm always here to help, but it makes it easier for me to help you when you are armed with good information.
BTW - Another helpful resource related to state tax web-sites is the "DOR Sales Tax Resources" page on SalesTaxSupport.com. Simply select the desired state using the drop-down (on first file tab) and a page will open which provides links to many helpful resources on that state's Department of Revenue (or Taxation) web-site.
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Other recent “Ohio (OH)” posts by Guy Nevers, CPA, MT:
- Tax on Temporary Labor in Ohio; A Not So Temporary Headache!
- Ohio Sales Tax: Amazon Law Bill Introduced
- Ohio Sales Tax: County "Add-On" Rules & Tools
- Ohio Sales Tax: Exemptions Outside the Tax Code
- Ohio Sales Tax: Business Fixtures or Real Property? (3 Key Questions)