Recent Legislation Affecting Ohio Sales and Use Tax

The following changes to Ohio sales and use tax were enacted pursuant to H.B. 508 effective September 6, 2012:

• Sales Tax owed on the Acquisition of Interests in Certain Pass-Through Entities: The definition of a “taxable sales” will now include transfers of ownership interests in a pass-through entity if the entity is not engaged in business and its sole assets are boats, planes, motor vehicles or other recreational property used primarily by the entity’s owners. This expands existing law, which requires sales tax to be paid on the sale of a corporation’s stock that only owns boats, planes, motor vehicles, etc. for the owner’s use, to LLCs, partnerships and other associations.
• Displaying Vendor’s License: All vendors must prominently display their vendor’s license or a copy thereof. Previously, this was only required for transient vendors.
• Vendor’s License Types: The service and delivery vendor categories are eliminated. The Tax Commissioner, however, is given authority to create specific vendor license classes. Descriptions of the different types of Ohio sales and use tax registrations can be found here.
• Cancellation of Vendor’s License: A vendor who moves locations may have its vendor’s license cancelled by the Tax Commissioner if it fails to notify the Commissioner of its new business location. Prior law did not have a penalty for failing to notify the Tax Commissioner upon moving to a new location.
• Delay of Local Rate Changes: Vendors making sales from a printed catalog are not required to apply local sales tax rates that differ from the rate specified in their catalogs until the beginning of the quarter 120 days after the Tax Commissioner gives notice of the local sales tax rate change.