Wednesday's tax tip Vol. 17 - Sales Tax

Business owner's ask me often about sales tax. When they should charge or not charge it.

In general, Ohio sales tax is charged on any product not for resale. For instance, if you sell soda to a business who provides it for their employees, you must charge sales tax. If you sell it to a merchant who intends to resale it, you do not charge the sales tax.

If you think of it this way, only one business charges sales tax. The only business that charges sales tax is the business that sells the product to the end user.

To muddy the waters a little more, some services are subject to sales tax. Manicure services, lawn services, massages, etc. are subject to sales tax. Legal and medical services are not subject to sales tax.

In addition, sales tax is not charged to any tax exempt, non profit business.

If a business, communicates that they are not subject to sales tax, you must obtain a copy of their vendor's license for your records. Otherwise, you could be legally liable for the tax due.

If you have a question regarding the sales tax, please email me at gtvcpa@yahoo.com