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Ohio Legislative Study Supports Services Sales Tax

  • Apr 30, 2012 | Susan McLain

In the Chairman’s Report by the Legislative Study Committee on Ohio's Tax Structure released April 13, 2012 by Ohio State Representative John Adams, it states, “The Sales Tax should apply to all economic activity on an equal basis, i.e., the tax should apply to all economic activity without discrimination, which is to say, it should apply to services as well as goods.”

The House of Representatives' Committee held several months of testimony to learn what Ohio business-people and consumers felt about the Ohio Tax Structure and how to improve it. Here is a synoposis of the feedback provided by witnesses giving testimony.

Sales Tax On Services – For and Against

Several witnesses spoke out in support of broadening the sales tax base to services. Two spoke out against with one speaking out specifically against sales tax on accounting services.

FOR: Zach Schiller, Policy Matters Ohio; Brent Mead, National Taxpayers Union; Dr. Richard Vedder, Professor at Ohio State University; and Lauren Michelle Kinsey.

AGAINST: Ohio Society of CPAs; Chad Bice, Rea & Associates; Theresa Mullen, Bruner-Cox LLP.

At least one witness spoke out specifically to “…not levy a sales or use tax on accounting services.”

Other Recommendations

It was recommended that Ohio begin charging sales tax on online purchases and that they revisit becoming a full member of the Streamlined Sales Tax Agreement. Currently, Ohio is an Associate Member. An Associate State “…is a state that has achieved substantial compliance with the terms of the Agreement taken as a whole, but not necessarily each provision, measured qualitatively.”

The Ohio Society of CPAs (OSCPA) has stated that “[t]he accounting profession strongly opposes any efforts to broaden the sales tax base to include accounting professionals….” They intend to continue to lobby against sales tax on services.

Additional sales tax changes that are being considered include reviewing the discount for timely filing and removing it; changing the reporting requirements for use tax; waiving use tax on a minimum amount; provide more details to local jurisdictions and shorten the time it takes the state to deliver sales tax revenue.

There was a general group of individuals who agreed they want the sales tax on coins to be repealed as it has hurt the coin industry.

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”