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Ohio "Use Tax"

Discussion in 'The Lounge' started by hardwaterfan, Jan 30, 2005.

  1. hardwaterfan

    hardwaterfan Twinsburg, OH (NE OH, northern edge of Summit Co.)

    without getting into the ridiculousness and unfairness of becoming an involuntary state emplyee and figuring their taxes for them... :mad: and without bothering to mention that there should be at least a minimum $25 threshold at which no one should have to pay due to all the extra work and record keeping the state expects us to do..... :mad:

    uhhh....anyway.. :eek: my question is,

    is "shipping+handling" taxable? :confused:

  2. Hardwater, preparing your state income taxes?! Joy. I'm not sure about the shipping and handling but i'm sure someone will help ya out.

    My thoughts...I wonder how many people actually say that they purchased stuff online and were not taxed? How does the IRS Track that. These internet companies don't have your social security number so how does it work?

  3. Reel Lady

    Reel Lady Dreams DO come true!

    Believe me, I know that Ohio sales and use taxes can be a pain in the butt!
    There are so many exemptions that without knowing your exact situation, it is hard to determine if shipping and handling would be exempt from tax. Here is some info off of the ohio department of taxation that you should find helpful. I've also included a link to the site for you at the end of this post.

    Sales Tax
    As amended by H.B. 95, the general definition of "price" in R.C. 5739.01(H)(1) will be as follows:
    (H)(1)(a) "Price," except as provided in divisions (H)(2) and (3) of this section, means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for any of the following:
    (i) The vendor's cost of the property sold;
    (ii) The cost of materials used, labor or service costs, interest, losses, all costs of transportation to the vendor, all taxes imposed on the vendor, and any other expense of the vendor;
    (iii) Charges by the vendor for any services necessary to complete the sale;
    (iv) On and after August 1, 2003, delivery charges. As used in this division, "delivery charges" means charges by the vendor for preparation and delivery to a location designated by the consumer of tangible personal property or a service, including transportation, shipping, postage, handling, crating, and packing.

    2. Delivery Charges
    Under prior law, separately stated delivery charges were not included in the definition of the "price" of a sale. As part of the tax reform and revenue package in H.B. 95, the Ohio General Assembly included "delivery charges" in the definition of "price." As a result, for sales made after August 1, 2003, where the vendor makes a taxable sale to a consumer and charges the consumer a delivery charge, as defined in R.C. 5739.01(H)(1)(a)(iv), that charge is part of the taxable price of the sale. As defined in R.C. 5739.01(H)(1)(a)(iv), a "delivery charge" means:
    … charges by the vendor for preparation and delivery to a location designated by the consumer of tangible personal property or a service, including transportation, shipping, postage, handling, crating, and packing.
    This statutory change does not make charges by delivery companies that are not making sales of tangible personal property sales subject to the tax. For example, a vendor in Columbus sells property to a consumer in Cleveland and pays a delivery company to transport the property to the consumer. The charge from the delivery company to the vendor is not a sale that is subject to Ohio tax. However, if the vendor passes that charge through to the consumer as a "delivery charge," that charge is part of the price of the sale from the vendor to the consumer. If the sale is taxable, tax must be collected from the consumer on the delivery charge.
    I hope I helped :)
  4. Holy crap. Just reading that made my head hurt.

  5. No wonder XXXX wants to amend the tax code. I doubt he understood that. And does this mean that Reel Lady is our OGF Official Tax Accountant? My head still hurts!

  6. Reel Lady

    Reel Lady Dreams DO come true!

    HECK NO I'm not the official tax accountant!!! :eek: But, fortunately, or unfortunately, I do own my own business, and collect sales tax for work performed that is not tax exempt. I've been to a couple sales tax seminars, and trust me, I think even the people working for the department of taxation are confused at times, regarding the who's, what's, when's and if's regarding sales tax issues, exemptions and so on. Believe it or not, there are many companies (usually the smaller ones), who are totally unaware of their tax exempt status, and many of them have been paying unnecessary sales tax for years!
    Sales tax in Ohio is a huge pain compared to many other states, mainly because we have different tax rates for all of our different counties, and on top of that, some counties have a "school tax" added on top of their state/county tax. It's no wonder the state has such a difficult time collecting sales tax from vendors. They need a system over haul, and they need to simplify it.
    At one of my seminars (at Kent State), there was a woman by the name of Karen Dogan (Tax Commisioner Agent) who was very helpful. I'm sure if you have any tax related questions, that she could be very helpful. Her number is 330-643-1730
  7. hardwaterfan

    hardwaterfan Twinsburg, OH (NE OH, northern edge of Summit Co.)

    ummm...thanks reel it taxable or isnt it?


    (just kidding....thank you for the info! :) )

    unbeleivable and not what i expected. :( :mad:
  8. We use a product called Quantum at work to manage our taxes. It handles the Tax Rates (for entire U.S.) and filing of State Returns. I can tell you first hand and from working through taxing issues every week that taxation sucks! It's such a mess and a bear to keep up with. Every month we get updates of taxation changes that has to be updated in our system, things like Rate Changes, Product Exemptions, etc.

    Many many states in the U.S. handles Sales and Use Tax differently. Some states do calculations based on Delivery Address, other states on Order Acceptance (where the order was taken) and on and on.... It gets real tricky when the state bases things on if you have a presence there and often times while we don't physically have a presence there we do have a service technician that has basically a warehouse that is his Van, Car, etc... ugh Even some states don't tax on certain things like plastics,etc. The software handles most of the decision making but when things go wrong my phone starts ringing.

    LOL, enough of the rant. I'm getting a headache just thinking about it. I'm always in a state of confusion and rely on Support for Quantum alot!