“Cleveland rocks!” That’s what they say about Ohio. There’s even a song about it! But what is nobody praising in chants or lyrics? …The state’s sales tax.
If you’re selling in the Buckeye state, you might be on the hook for collecting and remitting sales tax. How much should you charge, and how much will you owe? Let’s explore the basics of Ohio sales tax in this guide.
Sales Tax Rates in Ohio
Ohio uses a state-wide sales tax rate of 5.75%, but most cities, counties or other local authorities apply an additional sales and use tax from .75 to 2.25%.
For instance, a couple rural areas, such as Wayne County, only charge 6.5%. But a bigger city like Cleveland charges 8% because its county, Cuyahoga, adds the maximum local tax rate.
What is taxable in Ohio?
- Tangible products are generally taxable in Ohio, with a few exceptions. You can find a list of examples in the next section!
- Services are generally not taxed, from plumbing to freelancing.The state provides an extensive list here.
- Digital products like mobile apps, SaaS, and video/audio streaming services are taxed in Ohio.
Sales Tax Exemptions
Some purchases in the Buckeye State are exempt from sales tax collection. A few include:
- Most groceries
- Prescription medicines
- Certain construction materials
- Manufacturing materials and machinery
- Custom-built software that is downloaded, not streamed
Certain types of customers are exempt from sales tax, too. Government agencies, religious organizations, and some non-profits might not have to pay sales tax to you.
Making Sense of Ohio Taxes
If you’re confused about whether your goods are subject to sales tax in Ohio, we hear you. Collecting and remitting the correct amount of tax in the state is complicated – especially when you add the economic nexus and Amazon service into the equation.
Fortunately, you don’t have to go it alone. Sign up for a free trial with Quaderno to see how easy and pain-free tax collection can be with the right partner by your side.
For more detailed information, check out our Business Guide to Sales Tax in Ohio.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.