Most businesses starting in Ohio selling a product or offering certain services will need to register for an Ohio Vendor’s License. This is commonly referred to as a seller’s permit, sales tax permit, sales tax license, sales tax number, or sales tax registration.
Check out the rest of this guide to find out who needs a Vendor’s License, what products and services are taxable, how to register, and reporting requirements.
Related: Ohio Startup Checklist
Who needs a Vendor’s License in Ohio?
A business must register for a Vendor’s License in Ohio when:
- A business has an economic nexus. Economic nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Making taxable retail sales or selling taxable services in Ohio (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.).
- Hiring employees who work in Ohio (including remote employees, sales representatives, or agents).
- An online business located in Ohio is selling taxable products to Ohio residents.
- A remote seller who sells over $100,000 in tangible personal property or ships over 200 transactions annually to residents in Ohio.
What products and services are taxable in Ohio?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in the state of Ohio. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Food for human consumption off the premises where it is sold, prescriptions, and durable medical equipment are tax-exempt items in Ohio.
In Ohio, labor costs are often not subject to sales tax. For example, if you take your vehicle to a garage for engine repair, the labor cost for the mechanic’s work is not taxable. You would pay sales tax only on any new parts needed for the repair, like spark plugs or an alternator.
However, consider an Ohio business that custom-builds and installs home theaters. This company would design the system, construct custom components, and install everything in the customer’s home. While the direct labor for designing and installing the home theater system isn’t taxable, the total cost to the customer, including materials and labor, would be subject to sales tax. This is because the labor is part of the total value of the custom home theater system provided to the customer.
Digital Products
Some digital products, such as audiovisual work or digital books, are taxable in Ohio.
Services
Most services aren’t taxable in Ohio, however, there are a few exceptions, some of which include:
- Short-term lodging
- Private investigation or security service
- Car detailing
- Gyms
- Pest exterminating service
- Personal care services such as tattoos, tanning, massage
See the full list of taxable services in Ohio.
How to register for a Vendor’s License in Ohio
An Ohio Vendor’s License can be obtained by registering through Ohio Business Gateway or by mailing in the ST-1 form.
There are a few different types of Vendor Licenses in Ohio. They include:
- Vendor: A person with a fixed place of business in Ohio where taxable sales are made. This license can also be issued by the County Auditor’s Office.
- Transient Vendor: A retailer who transports goods to temporary places of business to make sales.
- Seller: Retailer located outside of Ohio who sells property and services to Ohio residents.
Information needed to register includes:
- Federal Employer Identification Number (FEIN) with the IRS or the owner’s Social Security Number if a sole proprietorship with no employees
- Type of business entity: sole proprietorship, partnership, corporation, Limited Liability Company (LLC)
- Date taxable sales will begin
- North American Industry Classification System (NAICS code)
- Description of business activity
- Business name
- Trade name or Trade Name Registration if there is one
- Primary address and mailing address
- Projected amount of sales tax to be collected
- Name, address, SSN of owners/officers/members
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which it then sends to the Ohio Department of Taxation.
How much is sales tax in Ohio?
If the purchase is made at a store or in a mobile location, the sales tax rate varies depending on where the sale took place in Ohio. In addition to the statewide sales tax, cities and municipalities may add additional sales taxes. When shipping in-state, the sales tax is based on the purchaser’s address.
To find sales tax rates throughout the state, see the sales tax rate finder from the Ohio Department of Taxation.
When are Ohio sales tax returns due?
The Department of Taxation will determine a filing frequency based on the expected sales volume, which will be monthly, quarterly, or semi-annually. Generally, a business collecting over $75,000 in sales tax annually will file monthly.
Filings are due on the 23rd day of the month following the reporting period unless the 23rd falls on a weekend or federal holiday, which would move to the next business day.
A filing indicating no sales is still required even if the business had no sales during the reporting period.
Ohio Vendor’s License FAQs
How much does an Ohio Vendor’s License cost?
Ohio has a $25 application fee for a new Vendor’s License.
How long does it take to get an Ohio Vendor’s License?
Most permits are issued immediately when registering online and up to 10 business days when applying by mail.
Do you have to renew an Ohio Vendor’s License?
The Vendor’s License is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Taxation.
How do I get a wholesale license in Ohio?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and an Ohio Sales Tax Exemption Certificate (also referred to as a wholesale license, resale certificate, or seller’s permit) to document that the purchased items are for resale.
Is a business license the same thing as a vendor’s license?
No – A business license and a sales tax permit serve distinct purposes.
A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government.
Most businesses will need both.
If you have questions about the Vendor’s License, the Ohio Department of Taxation has an FAQ page for sales & use tax in Ohio or can be contacted by calling 888-405-4039.