To conduct most types of business in Ohio, you will need a vendor’s license. An Ohio vendor’s license is required to make taxable retail sales within Ohio. A taxable sale includes all retail sales and most service-related sales, unless exempt under state law. Vendors must add the current Ohio sales tax onto the sales price, collect it from the customer, and file regular returns along with these payments. Tax returns and payments are scheduled monthly, quarterly or semi-annually, depending on the projected sales volume and type of business.
Determine what type of vendor’s license or licenses you need. The state of Ohio issues four basic types of vendor’s licenses. Regular vendor’s licenses are required for each fixed business location in Ohio where retail sales are made. Businesses with fixed locations apply for vendor’s licenses from the auditor of the county where each fixed retail establishment is located. Businesses without a fixed location apply for vendor’s licenses directly from the Department of Taxation. These include service vendors, transient vendors and delivery vendors. Service vendors provide intangible goods or services, such as computer repair or lawn care. Transient vendors sell from temporary locations such as flea markets, trade shows and craft fairs. Delivery vendors have no fixed retail locations and deliver 100 percent of their merchandise.
Download the proper form from the Ohio Department of Taxation’s Web site. (See Resources). Paper forms are also available from county auditor offices for regular, fixed-location businesses. (See Resources).
Fill out the simple one-to-two page form and return it with the appropriate fee. Fixed-location businesses submit the form to the county auditor where the business is located, either by mail or in person. Other businesses mail the form to the Department of Taxation. As of this writing, the fee is $25 each for most types of vendor’s licenses.
Collect taxes on sales. The current state sales tax rate can be found on the Department of Taxation Web site. (See Resources) Businesses with a fixed-location, regular vendor’s licenses must collect county sales tax as well as state sales tax.
Keep good records. Records of daily sales, taxes collected, and copies of any tax-exempt certificates (provided by customers who are exempt from sales tax, such as churches) must be kept on file for four years, in most cases. The tax commissioner must have access to these records at any time. Certain food-service operators may only be required to keep records for specific 14-day periods per quarter as indicated by the tax commissioner.
File your tax returns and payments on time according to the schedule provided with the vendor’s license.
Vendor’s licenses can be suspended if returns and payments are not made in a timely manner.
Vendor’s licenses can be revoked if the tax commissioner determines that the business is making no taxable sales.