Mr. Contractor: Are You Correctly Addressing Ohio Sales Tax On Your Construction Contracts? (Part I)
June 30, 2010
As the deemed consumer, a contractor must pay Ohio sales/use tax (“tax”) on its purchases of materials incorporated into real property, unless an exemption exists. The contactor’s related transaction with the property owner is characterized as a construction contract. Since tax was already paid on the contractor’s purchases, no sales tax needs to be collected… Read More
Maximizing the Manufacturing Exemption from Ohio Sales/Use Tax: Part 1 – The Commitment of Raw Materials
May 28, 2010
Generally, all property primarily used or consumed during the manufacturing operation is exempt from Ohio sales and use tax. Therefore, the scope of the manufacturing exemption is determined by the beginning and end of the taxpayer’s “manufacturing operation”. A manufacturing operation commences upon the commitment of raw materials, which occurs at the earliest point where:… Read More
Ohio CAT: Considerations for Combined and Consolidated Groups
April 28, 2010
Entities having “substantial nexus” with Ohio and more than 50% common ownership are required to file Ohio Commercial Activity Tax (“CAT”) returns as a combined taxpayer, unless an election to file as a consolidated group is made. A group may elect to file CAT returns as a consolidated taxpayer if the group has at least… Read More
Watch Out For That Alleged “Business Fixture”, I Mean Bunker, In Front Of The Green!
April 5, 2010
In light of the Ohio Supreme Court’s decision in Funtime v. Wilkins (2004), 105 Ohio St.3d 74, the Ohio Department of Taxation (the “Department”) seems to have an increased interest in auditing golf courses for Ohio sales/use taxes. In Funtime, the Ohio Supreme Court held, in sum, that an item permanently affixed to real property… Read More
When “Sales Tax Included” Is Not Actually Included…
March 19, 2010
Many contracts for the purchase of tangible personal property include a lump sum purchase price and a phrase such as “all tax included” or “includes applicable sales tax”. However, this language is not sufficient to protect a consumer from collection of unpaid sales tax by the Ohio Department of Taxation (the “Department”). The Department has… Read More
Ohio CAT: Identifying Businesses with “Bright-Line” Nexus
March 4, 2010
The Ohio Department of Taxation (the “Department”) is focused on increasing registration and compliance with the commercial activity tax (the “CAT”), which replaced Ohio’s corporate franchise, personal property and personal income taxes (although the final phase-out of the personal income tax has been delayed). As part of the Department’s addition of 100 revenue generating employees,… Read More