Nonprofits, educational institutions, and other businesses that sell taxable goods or services in Ohio must file a state tax exemption form to ensure they are not liable for any sales and use taxes. Keeping this form up to date is essential to ensuring that your business remains in compliance with Ohio’s tax laws.
The state of Ohio has a number of different exemptions for individuals and businesses that are subject to its sales and use tax. One of the most common is for farmers, who are exempt from paying sales and use taxes on purchases made for agricultural production purposes. Ohio also has a number of other exemptions for specific groups, such as nonprofit organizations and local governments.
As part of the Streamlined Sales and Use Tax Agreement, Ohio has a blanket resale certificate that allows buyers to use a single certificate with multiple vendors. This can save time and effort because buyers don’t need to submit a separate exemption certificate for each vendor.
Previously, states could only require businesses to collect sales and use tax if they had a physical presence in the state. However, after the Supreme Court ruling in South Dakota v. Wayfair, Ohio and other states can now charge sales tax based on the businesses’ economic and virtual connections to the state, known as “nexus.” Businesses with nexus in the state must register with the Department of Taxation and collect, report, and remit sales and use taxes.
How to File Ohio Tax Exempt Forms?
- Unit Exemption Certificate: This is for a single purchase of tangible personal property or specific services. You can find the form and instructions on the Ohio Department of Taxation website: Ohio Sales and Use Tax Unit Exemption Certificate: tax.ohio.gov
- Blanket Exemption Certificate: This is used to claim an exemption on multiple purchases from the same seller. This is also available on the Ohio Department of Taxation website: Ohio Blanket Exemption Certificate: tax.ohio.gov
- Motor Vehicle/Off-Highway Vehicle Exemption Certificate: This is used to claim an exemption when you’re buying a motor vehicle, off-highway motorcycle, or all-purpose vehicle. You’ll present this to the Clerk of Courts when you apply for the title.
There’s also the Multistate Tax Commission Uniform Sales and Use Tax Certificate. Ohio accepts this form for claiming exemptions based on resale or incorporating an item into a product for sale. You can find this form on the Multistate Tax Commission’s website: Multistate Tax Commission website: www.mtc.gov
Keep in mind that these certificates are based on your intended use of the items or services you’re purchasing. Make sure you understand the requirements before claiming an exemption.