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Effective in 2009, Ohio will require all vendors to file sales tax returns electronically, regardless of sales volume. The first electronic return is due by February 23, 2009 for monthly filers, and July 23, 2009 for semi-annual filers. Vendors may file by using the Ohio Business Gateway, Sales and Use eForms, or Ohio’s Telefile system. (Sales Tax Electronic Filing Notice, Ohio Department of Taxation, August 19, 2008)


The Ohio Supreme Court has reversed the Board of Tax Appeals’ decision that a car manufacturer was the consumer of taxable repair parts and services provided free-of-charge to customers under its “goodwill-repair” program. The Ohio Supreme Court determined that the car buyers, who actually enjoyed the benefit of the services and took possession of the parts, were the consumers of both. The Court found that the manufacturer increased the selling price of the vehicles to cover the cost of anticipated future goodwill repairs, which indirectly charges the customer for the repairs. The court differentiated this from a situation where a customer purchases a warranty contract, which is a contractual right not to be charged for those parts and services. In that situation, the manufacturer is the end user of the parts and services because they are consumed during the manufacturer’s fulfillment of the warranty contract. Further, since sales tax is assessed on the full sales price of the vehicle, the consumer pays the necessary tax on the goodwill repairs and parts at the time of vehicle purchase. Since the car manufacturer is not considered the consumer, it did not incur a use-tax obligation when it paid its dealers for the repairs and replacement parts. (DaimlerChrysler Corp. v. Levin, Slip Opinion No. 2008-Ohio-259)


Effective June 24, 2008, Ohio enacted a budget bill that exempts some items from state sales tax. Sales of machinery, equipment, and software to a “qualified direct selling entity” for use in a warehouse or distribution center used primarily in storing, transporting, or handling inventory that is held for sale to direct sellers and that is primarily distribution out of state. A qualified direct selling entity if defined as “an entity selling to direct sellers at the time the entity enters into a tax credit agreement with the tax credit authority pursuant to section 122.17 of the Revised Code, provided that the agreement was entered into on or after January 1, 2007.” This exemption will expire on June 24, 2013. (H.B. 562 laws 2008, effective June 24, 2008)


The service of providing point-of-sale coupons to customers at retail stores throughout Ohio is exempt from sales taxes on the basis that it is a marketing service provider. The coupon service provider does, however, have to pay taxes on the materials and means to which they deliver the coupons. The coupons are provided to retailers for free in order to pass out to the retail shoppers. (Opinion of the Tax Commissioner, No. 07-0006, Ohio Department of Taxation, February 25, 2008)


The Tax Commissioner of Ohio has issued an opinion stating that billing and collection services performed by local exchange carriers and invoiced to a telecommunication provider are nontaxable personal services, and therefore not subject to sales tax. (Opinion of the Tax Commissioner, No. 06-0013, Ohio Department of Taxation, August 17, 2007, released November 29, 2007)



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