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T'is the Season in Ohio: How to Tax Snow Removal


The Ohio Department of Taxation has released updated information regarding the taxation of landscaping, lawn care, and -- most important at this time of year -- snow removal services. Folks who find themselves snowed in might use the opportunity to brush up on just how sales and use tax applies to snow removal services in Ohio.

Like landscaping and lawn care services, snow removal service is subject to sales tax (R.C.5739.01(B)(3)(t)). Snow removal service is defined as "… the removal of snow by any mechanized means… ." However, the definition "does not include the providing of such service by a person that has less than five thousand dollars in sales of such service during the calendar year." It also precludes anyone wielding only a shovel.

Anyone who provides landscaping, lawn care, or snow removal services in Ohio and does $5,000 or more in gross sales is required to register for a vendor's license and collect and remit sales tax. Once $5,000 in gross retail sales has been achieved, tax is due on all future sales, from that point on.

The Ohio DOT provides a number of examples to clarify its policy:

  1. If you provide landscaping and lawn care service, "once you reach $5,000 in gross sales from the service in one calendar year, you must register as a vendor, and collect and remit sales tax on all sales in excess of $5,000."
  2. If you provide snow removal service, once you reach $5,000 in gross sales from the service in one calendar year, you must register as a vendor, and collect and remit sales tax" on all sales in excess of $5,000.
  3. If you provide both landscaping and lawn care service and snow removal service, and gross sales from landscaping and lawn care were $5,000 or more but gross sales from snow removal were less than $5,000, "you must register as a vendor and collect and remit sales tax on the 'landscaping and lawn care service'" but not on the snow removal service.
  4. If you provide both landscaping and lawn care service and snow removal service, and gross sales from snow removal were $5,000 or more but gross sales from landscaping and lawn care were less than $5,000, "you must register as a vendor and collect and remit sales tax on the 'snow removal service'" but not on the landscaping and lawn care service.
  5. If you provide both landscaping and lawn care service and snow removal service and retail sales from both services reached $5,000 or more, "you must register as a vendor and you must collect and remit sales tax on both the 'landscaping and lawn care service' and the 'snow removal service' until you cease to do business."
  6. If you provide both landscaping and lawn care service and snow removal service and retail sales from both services were under $5,000, "you do not need to register …[or] collect and remit sales tax on any of your sales of these services."

Again, the department underscores that once you have made $5,000 in gross retail sales, registered as a vendor, and collected and remitted sales tax, you must collect and remit taxes on all future sales until you cease to do business. There is no annual exemption of $5,000.

Any vendors required to collect and remit sales tax in Ohio must electronically file a sales tax return each month, "even if no sales are made and no sales tax is due."

The updated release "revises and replaces the prior release issued December 2010." In addition to providing the details listed above, it delineates which activities are "sales and/or installation of tangible personal property", and which are services. It also clarifies what does and does not qualify for an exemption.

For example, with respect to snow removal services:

  • Sales tax must be charged when salt is applied "in conjunction with mechanized snow removal."
  • Sales tax should not be paid on the purchase of the salt that will be applied by mechanized means, pursuant to R.C. 5739.02(B)(42)(m).
  • But, if you "apply salt by hand (non-mechanized means), such service is not taxable" and "you must pay sales tax on your purchase of salt."

Phew. Maybe we should all just stay home and drink cocoa until the snow melts.

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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.