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Ohio Department of Taxation: Know Sales and Use Tax Law

  • Nov 26, 2012 | Gail Cole

The Ohio Department of Taxation has issued a News Release reminding Ohio shoppers of the state use tax, which has been on the books since 1936. If sales tax is not charged on purchases made from a catalog, by phone, or over the internet, Ohio residents are required by law to pay use tax on those purchases directly to the Ohio Department of Taxation.

The reminder was released on November 21, 2012 -- before the heavy shopping days of Black Friday and Cyber Monday. Tax Commissioner Joe Testa acknowledged that "most people and a lot of businesses don't know about or understand the [use] tax… ." However, he added that there is "a growing need to raise awareness of the use tax obligation" because "the online and catalog markets keep getting bigger."

Testa reported that "more than 57-thousand Ohioans made direct, use tax payments" totaling more than $3 million in 2011. That revenue is expected to grow in 2012.

The use tax was created last century in reaction to Ohio residents who drove across state lines to shop, thereby avoiding Ohio sales tax. Use tax is taxed at the same rate as the sales tax.

Since 2000, Ohio income tax returns have included a line for use tax. Residents are encouraged "to keep track of untaxed purchases, total them up at the end of the year, and make a payment when they file their income tax return… ." There is also a calculator on the ODT website that determines how much tax is due on an untaxed purchase. Rates vary depending on where the purchaser lives.

Ultimately, states hope there will be a more simple and universal system for collecting sales and use tax on online and catalog purchases. The Streamline Sales and Use Tax Agreement (SSUTA) is working to that end, and Congress is considering legislation such as the Main Street Fairness Act, which would "remove the barrier preventing states from collecting sales taxes in exchange for states simplifying their sales tax laws."

In the meantime, shoppers in Ohio beware: the Ohio Department of Taxation considers you forewarned.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.