Ohio House Bill 315 Brings Key Changes to Delivery Network Tax Regulations

Ohio’s newly enacted House Bill 315 (H.B. 315) introduces significant changes to how delivery network services collect sales and use tax. The legislation aims to clarify tax obligations for companies that facilitate deliveries between customers and local merchants. These changes could have a broad implication for businesses utilizing third-party delivery platforms, such as restaurants, retailers, and grocery stores.

Under prior law, companies that coordinated deliveries were considered the seller of the goods being delivered, making them responsible for collecting and remitting sales tax on the full price of the transaction, including the cost of the goods and the delivery fees. H.B. 315 allows delivery network companies to obtain a waiver that allows them to shift tax collection responsibilities back to the sellers of the goods being delivered. While companies that obtain the waiver will no longer be required to collect tax on the goods, they will be required to collect and remit sales tax on the delivery fees they charge. Delivery network companies are responsible for notifying each local business that operates on its marketplace that they will now be considered the seller regarding the products the business sells and is now responsible for collecting and remitting sales tax on the items they sell through the marketplace. This change ensures that the service aspect of the transaction is taxed, even if the goods being delivered are exempt under the waiver system. The legislation also establishes clearer definitions of what constitutes the seller and the taxable price in the transaction. Previously, ambiguities in the tax law led to inconsistencies in tax collection and remittance, particularly in cases where the delivery network services acted as intermediaries and not direct sellers.

The tax structure changes introduced by H.B. 315 are expected to impact businesses and consumers in several ways:

• Pricing Adjustments: Some businesses may modify their pricing strategies to reflect the new tax structure.
• Incentives for Direct Sales: These changes may encourage some businesses to promote direct sales through their own platforms rather than third-party delivery services.
• Greater Transparency: Consumers will see a clearer breakdown of taxes, distinguishing between product and delivery tax charges.
• Simplified Compliance: Delivery service providers will benefit from reduced tax collection obligations on goods, making their compliance responsibilities more straightforward.

While the law simplifies tax administration for delivery services, businesses must adjust their processes to comply with the updated regulations. As the implementation date approaches, affected companies should take proactive steps to align their tax practices with the new legal requirements.

(H.B. 315 135^th General Assembly Final Analysis, Ohio Legislative Service Commission, January 2, 2025)