Is There Tax on Takeout Food in Ohio?

Ohio’s approach to taxing food sales involves distinctions based on where the food is consumed and its type. While the state imposes a sales tax on many retail transactions, food items often have unique treatment.

Sales Tax on Food in Ohio

Ohio applies sales tax to retail sales of tangible personal property, but food is exempt unless consumed on the premises where it is sold. Food purchased from a restaurant and consumed at that location is subject to sales tax. However, food sold for consumption off the premises, known as takeout, is exempt from sales tax.

The state sales tax rate in Ohio is 5.75%. In addition to this state rate, counties and transit authorities can levy their own sales taxes, which are added to the state rate. This results in varying total sales tax rates across different areas of Ohio, with combined rates potentially reaching up to 8% in some counties. The vendor, such as a restaurant, collects this tax at the point of sale when it applies.

What Qualifies as Taxable Prepared Food

Ohio law defines “food” broadly as substances sold for human ingestion or chewing for taste or nutritional value. This definition excludes alcoholic beverages, dietary supplements, soft drinks, and tobacco products. These excluded items are always subject to sales tax, regardless of where they are consumed. For instance, a soft drink purchased with a takeout meal will be taxed, even if the food itself is not.

The key distinction for sales tax on prepared food in Ohio centers on the location of consumption. If prepared food, such as a restaurant meal or a hot deli item, is consumed on the premises of the seller, it is subject to the applicable sales tax. Conversely, if the same prepared food is purchased for takeout, it is exempt from sales tax.

How Groceries Differ for Tax Purposes

Most basic grocery items purchased for home consumption are exempt from sales tax in Ohio. This exemption covers a wide array of staples, including fresh fruits and vegetables, meats, dairy products, breads, and unsweetened bottled water.

However, certain items commonly found in grocery stores are subject to sales tax. These include soft drinks, dietary supplements, and alcoholic beverages. Even if purchased from a grocery store, these items are always taxable. Therefore, while a grocery cart full of produce and packaged goods would be tax-free, adding soda would result in sales tax on the beverage portion of the purchase.

Calculating the Sales Tax on Takeout

When sales tax applies to a purchase in Ohio, such as for food consumed on-premises or for taxable beverages in a takeout order, the calculation involves combining the state and local rates. To this, any applicable county or transit authority sales tax rate is added. These local rates vary by county, ranging from 0.75% to 2.25%, leading to a total combined sales tax rate that can differ significantly across Ohio.

The total sales tax is calculated by applying this combined percentage to the taxable portion of the purchase. For example, if a takeout order includes a soft drink, the sales tax would be applied only to the cost of the soft drink, using the combined state and local rate for the location where the purchase is made. This sales tax amount appears as a separate line item on the customer’s receipt.