Do You Need to Get a Sales Tax Permit in Ohio?
Quick Answer: You need to get a sales tax permit in Ohio if you have a physical presence or meet economic nexus requirements. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in Ohio, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in Ohio for more information about that process.
Common Ways to Have Sales Tax Nexus in Ohio
1. Economic nexus in Ohio
If you have made $100,000 in sales or had at least 200 transactions in the current or previous calendar year in Ohio, then you are required to register for, collect, and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in Ohio. Nexus has been created based on your volume of sales.
For more information see Marketplace Facilitators FAQ’s #2.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence nexus in Ohio
The following creates physical presence nexus in Ohio. If you have any of the following in Ohio you will need to get a sales tax permit:
- A place of business within the state.
- Employees, agents, representatives, solicitors, installers, repair people, salespeople, or other individuals in Ohio for the purpose of conducting its business;
- Using a person in the state for the purpose of receiving or processing orders of goods or services;
- Delivering tangible personal property into the state by means other than common carrier;
- The out-of-state seller owns tangible personal property that is rented or leased to a consumer in the state;
- The out-of-state seller owns, rents, leases, maintains, or has the right to use and uses tangible personal or real property that is physically located in this Ohio; or
- The out-of-state seller is registered with the secretary of state to do business in Ohio or is registered or licensed by any state agency, board, or commission to transact business in the state or to make sales to persons in this state.
For more information, please see ST 2001-01.
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
Free State Audit Risk Guide
See which states pose the greatest risk to your business.
State-by-State Audit Risk Percentages
Do You Need a Sales Tax Permit in Ohio If You Only Sell on Marketplaces?
If you are an out-of-state online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), Ohio sales tax will be remitted by the marketplace and you do not need to get a sales tax permit.
For more information about this, please see Marketplace Facilitator FAQ #6.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, feel free to check out our Sales Tax Starter Kit service.
Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.