Ohio State Tax Blog

Current developments, commentary and helpful resources regarding Ohio state and multistate taxes from attorneys Steven A. Dimengo and Richard Fry. We concentrate on all aspects of Ohio state taxation, including sales/use tax, income tax and commercial activity tax, from audits to appeals before the Ohio Board of Tax Appeals and Ohio Supreme Court, and have significant experience in multistate tax planning. Contact us.

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Ohio Sales/Use Tax: Exempt Purchases of Property Incorporated into Real Property PDF Print E-mail
Friday, 07 June 2013 12:05

Generally, a contractor’s purchase of tangible personal property to be incorporated into real property is taxable. However, a contractor’s material purchases are not taxable when incorporated into:

  • Real property under a contract with, or that is accepted for ownership by, the United States (including its agencies) or the state of Ohio or a political subdivision thereof;
  • A horticulture or livestock structure for a person engaged in the business of horticulture or producing livestock;
  • A house of public worship or religious education;
  • A building used exclusively for charitable purposes by a charitable organization;
  • A building under a contract with a 501(c)(3) tax-exempt organization, when the building is used exclusively for the organization’s exempt purpose;
  • The original construction of a sport facility under R.C. 307.696;
  • A convention center qualifying for the real property tax exemption under R.C. 5709.084; or
  • Real property located outside Ohio, if the destination state would also exempt the contractor’s purchase of such materials.

These exemptions should be supported by the contractor's receipt of an exemption certificate. The contractor should obtain a "Sales and Use Tax Construction Contract Exemption Certificate" (Form STEC CC) from the customer / property owner. Then, the contractor should provide "Sales and Use Tax Contractor's Exemption" certificates (Form STEC CO) to its suppliers. O.A.C. § 5703-9-14(I). Even if the contract is exempt, the contractor is still liable for taxes on property not incorporated into real property improvements, such as tools, equipment and consumables.

Last Updated on Friday, 07 June 2013 12:09
 
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Ohio State Tax Attorney, Steven A. Dimengo

Steve Dimengo is recognized as one of the leading tax attorneys in Ohio, where he has been serving clients for over twenty-five years. Full Profile. Cases. Email.

 

Ohio State Tax Attorney, Richard B. Fry III

Richard Fry is an Associate focusing on business law, specifically taxation. He holds a J.D. and Masters of Taxation from the University of Akron. Full Profile. Email.

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Steve will be speaking at the Lorman Sales and Use Tax in Ohio Seminar to be held in Akron on January 21, 2014.  He will be discussing Manufacturing Exemptions, Transfer of Business and Personal Liability for Sales tax.  Click here to see more (and register).

 

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