Most businesses starting in Ohio that are selling a product or offering certain services will need to register for a Vendor’s License. This is commonly referred to as a seller’s permit, sales tax permit, sales tax license, sales tax number or sales tax registration.
Check out the rest of this guide to find out who needs a Vendor’s License, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a Vendor’s License in Ohio?
A business must register for a Vendor’s License in Ohio when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Selling products and taxable services in Ohio (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in Ohio
- An online business located in Ohio is selling taxable products to Ohio residents
- An out-of-state business selling to Ohio residents and one of the
- Total annual sales of tangible personal property to Ohio residents is $100,000 or more; or
- Having 200 or more transactions with Ohio residents annually.
What products and services are taxable in Ohio?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Ohio. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Food for human consumption off the premises where sold, prescriptions and durable medical equipment are a few items that are tax exempt in Ohio.
Labor in most cases isn’t taxable in Ohio. For instance, let’s say you broke the screen to your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.
Some digital products are taxable in Ohio such as audiovisual work or digital books.
Most services aren’t taxable in Ohio, however there are a few exceptions, some of which include:
- Short-term lodging
- Private investigation or security service
- Car detailing
- Pest exterminating service
- Personal care services such as tattoos, tanning, massage
How to register for a Vendor’s License in Ohio
There are a few different types of Vendor’s Licenses in Ohio. They include:
Vendor – A person wit a fixed place of business in Ohio where taxable sales are made. This license can also be issued by the County Auditor.
Transient Vendor – A retailer who transports goods to temporary places of business to make sales.
Seller – Retailer located outside of Ohio and makes sales of property of services to Ohio residents.
Information needed to register includes:
- Federal Employer Identification Number (FEIN), or SSN if a sole proprietorship with no employees
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Date taxable sales will begin
- North American Industry Classification System (NAICS) code
- Description of business activity
- Business name
- Trade name or DBA if there is one
- Primary address and mailing address
- Projected amount of sales tax to be collected
- Name, address, SSN of owners/officers/members
How much does a Vendor’s License cost in Ohio?
There is no cost for a Vendor’s License in Ohio.
How long does it take to get an Ohio Vendor’s License?
Most permits are issued immediately when registering online and up to 10 business days when applying by mail.
Do you have to renew your Ohio Vendor’s License?
The Vendor’s License is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Department of Taxation.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Ohio Department of Taxation.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find sales tax rates, see the sales tax rate finder from the Ohio Department of Taxation.
When are Ohio sales tax returns due?
The Department of Taxation will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly or semi-annually. Generally, a business collecting over $75,000 in sales tax annually will file monthly.
Filings are due the 23rd day of the month following the reporting period, unless the 23rd falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end user of the item.
Wholesalers and distributors will require a sales tax number and an Ohio Sales Tax Exemption Certificate to document the items being purchased are for resale.
If you have questions about the Vendor’s License, the Ohio Department of Taxation has an FAQ page for sales & use tax in Ohio or can be contacted by calling 888-405-4039.