What Is Sales Tax in Ohio? Rates & Rules

Sales tax in Ohio operates as a consumption tax, meaning it is applied to the sale of tangible personal property and certain services. Sellers are responsible for collecting this tax at the point of sale from consumers on behalf of the state. This system ensures that a portion of the revenue generated from retail transactions contributes to public services and state operations.

Ohio’s Statewide Sales Tax Rate

Ohio maintains a statewide sales tax rate of 5.75 percent, which serves as the foundational rate for transactions across the state. This percentage is directly applied to the purchase price of taxable goods and services. For instance, if a consumer purchases an item for $100 that is subject to sales tax, an additional $5.75 would be added to the total cost. This statewide rate is consistent before any local tax additions are factored into the final amount.

Taxable Goods and Services in Ohio

In Ohio, sales tax is primarily levied on the retail sale, lease, and rental of tangible personal property. This category broadly includes most physical items purchased by consumers. Common examples of taxable goods encompass everyday items such as clothing, electronics, furniture, and vehicles. Digital goods and Software as a Service (SaaS) are also generally subject to sales tax, encompassing items like downloaded software or streaming services.

Beyond physical products, Ohio also taxes specific services that are enumerated by law. These can include landscaping and lawn care services, building maintenance, and cleaning services. Other taxable services extend to personal care, such as manicures, tattoos, and hair removal, and also cover certain digital services like automatic data processing. Repair and installation services for taxable tangible personal property are also typically subject to sales tax.

Common Sales Tax Exemptions in Ohio

Ohio provides specific exemptions from sales tax for certain goods and services. A significant exemption applies to most food items purchased for consumption at home, commonly referred to as groceries. This exemption helps to reduce the cost of essential household items. Similarly, prescription medications and many medical devices are exempt from sales tax, ensuring access to necessary healthcare items.

Many professional services, such as legal, accounting, or medical services, are generally not subject to sales tax in Ohio. Recent legislative updates have also expanded exemptions to include various child and baby products, such as diapers, child restraint devices, and cribs. These exemptions are specific exceptions to the general rule of taxation on goods and certain services, providing financial relief on particular categories of purchases.

Local Sales Taxes in Ohio

In addition to the statewide sales tax, counties and regional transit authorities in Ohio have the authority to impose their own local sales taxes. These local taxes are added to the state’s 5.75 percent rate, resulting in a variable total sales tax rate depending on the specific location of the transaction.

The presence of these local levies can cause the total sales tax rate to range anywhere from the base 5.75 percent up to 8 percent in some areas. For businesses operating in Ohio, particularly those with multiple locations or engaged in e-commerce, understanding the specific local rates applicable to each transaction is important for accurate tax collection and remittance. Ohio is an origin-based sales tax state for in-state vendors, meaning the sales tax rate is determined by the seller’s location.