Why I love takeout in Ohio – Wacky Tax Wednesday

It might be time for me to move to Ohio.

The Buckeye State is conveniently located for folks, like me, with ties to both coasts. It’s home to world-class medical facilities and the Rock & Roll Hall of Fame. And I’d save money on takeout if I lived there: While Ohio sales tax generally applies to food sold for consumption in a restaurant, takeout food is sales tax exempt. 

It’s true. It’s one of those curious quirks of sales tax law.

This is not the case in all states. Washington, where I currently reside, generally taxes restaurant food whether purchased for dine-in or takeaway. My former stomping ground of New Hampshire imposes a meals and rooms tax on restaurant meals even though the state has no general sales tax.

Sales tax typically applies to both dine-in and takeout food in Colorado, Florida, Indiana, Kentucky, New York, Texas, and Wisconsin, at least if it’s from a restaurant. In fact, although it’s reckless to make generalizations about sales tax, I feel pretty confident saying that just about every state taxes most (not all!) takeout and dine-in restaurant meals the same. 

Except Ohio, where takeout food is tax exempt but the same meal purchased to be eaten in the restaurant is usually subject to sales tax.

“Each retail sale made in this state” is subject to Ohio sales tax under Ohio Revised Code Section 5739.02, unless an exemption applies. The law doesn’t specify that restaurant food is subject to sales tax, but it does state that the tax does not apply to a number of items, including “sales of food for human consumption off the premises where sold.”

The Ohio Department of Taxation guidance for the food service industry underscores the point with this Q&A:  

When is the sale of food taxable?

• Food consumed on the premises is always taxable. 
• Food sold for consumption off the premises is not taxable. 

How about that?

Some of the most perplexing sales tax laws in this country involve food. Ten of the 20 wacky taxes we highlighted in honor of Avalara’s 20th anniversary feature food, and there are plenty more wacky tax tales where that came from. 

But let’s stick with Ohio for now. 

If you live in Ohio, you typically take advantage of the takeout tax perk, and you’re tired of eating in your car, take heart. You can enjoy tax-free dine-in meals in your favorite restaurants July 30 through August 8, 2024, during Ohio’s expanded sales tax holiday. For 2024, restaurant meals under the $500 cap qualify for the temporary sales tax exemption no matter where you sit.

This is good news for Ohio consumers, though it could be taxing for Ohio restaurants unaccustomed to participating in sales tax holidays. 

Learn more about the 2024 sales tax holidays.