Ohio Sales Tax Exemption Rules
Sales tax is a tax that is levied upon the purchaser of goods. While Ohio's sales tax regulations are typical of most states, many goods and services in Ohio are exempt from the tax. Most of the exemptions relate to businesses, while a select few relate to individuals.
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Manufacturing Exemption
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Ohio companies that purchase raw materials that are used in their production process are exempt from paying sales tax on these purchases. Raw materials include products that are directly used and assembled into the finished product. Other products that are used in production, including oils and lubricants used on the machinery used to produce the item, are also exempt.
Charitable Organizations
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Ohio tax code stipulates that sales made to nonprofit organizations should be exempt from sales tax. The law requires that organizations deemed to be charitable should be operating for the sole purpose of eradicating poverty and illness or for other charitable activities defined as such by the law. Ohio tax law allows sales made to churches to be exempt from the tax as well.
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Direct Marketing
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Ohio tax law stipulates that sales made to direct marketing firms, under certain circumstances, are exempt from the sales tax. Materials that are used in the production of advertising materials that offer the consumer chances of winning a sweepstakes or similar contest or printing supplies such as pre-press plates, artwork and other items are exempt from sales tax.
Resale Exemption
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Ohio companies that purchase items for the purpose of reselling them are exempt from paying the sales tax. The purpose of this exemption is to prevent the item being sold from being taxed twice, as federal law prohibits the practice of double taxation. Ohio tax law stipulates, however, that the item must be resold in the same condition in which it was purchased.
Yard Sales & Garage Sales
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Ohio tax law permits individuals to conduct a yard sale at their home without charging sales taxes, but it differentiates between casual sales and retail sales. A casual sale occurs when the yard sale operator sells his own items that were purchased at an earlier date and used by the seller. A retail sale occurs when the yard sale operator purchases items with the intent to resell the items at her a yard sale or garage sale.
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