Can a Mechanic Charge Sales Tax on Labor in Ohio?
If you take your car in for repairs in Ohio, expect to be charged sales tax on the mechanic's labor. At the time of publication, the Ohio sales and use tax rate is 5.5 percent. While consumers expect to pay sales tax when purchasing tangible goods, many services also generate sales tax revenue for the state of Ohio.
While most tangible personal property and services are subject to Ohio sales tax, certain items are exempt. This includes food sold in supermarkets for consumption elsewhere, newspapers, magazines and non-motor vehicles sales by nonprofit organizations. All items purchased with food stamps are tax exempt. Animals sold from licensed shelters and humane societies are free from tax. Any sales to local, state, or federal government agencies are tax-free. You do not have to charge sales tax if making a casual sale, such as items sold at a garage sale, unless the item is a motor vehicle or similar vehicle that requires titling. However, motor vehicles sold in Ohio to an out-of-state resident and immediately removed is not taxable, as long as it will be titled in another state.
Other labor services that are subject to sales tax in Ohio include lawn care or landscaping, security, janitorial and building maintenance, exterminating and installing personal property. Any sort of repair service, from mechanics to tailors, is subject to sales tax, unless the item under repair is tax exempt. If an employment company provides temporary help to a business, it can charge sales tax for the worker's hours. Beauty and other personal service salons charge tax for certain procedures, such as manicures and pedicures, tanning, skin care and tattooing.
If you have work done on your tires, the labor also is subject to sales tax. According to rule 5703-9-20 of the Ohio Administrative Code, anyone engaged in "retreading, recapping or relugging of tires" is considered to be in the production and sale of tangible personal property. Under this rule, the entire amount charged to the customer, including labor and materials, is the amount subject to sales tax, no matter how the customer is billed for the charges.
Professional services, such as those rendered by attorneys, accountants or physicians, are not taxable under Ohio law. Insurance transactions are not subject to tax if there is any tangible personal property transferred as a "small item for which no separate charge is made." Beauty salons and barber shops do not charge sales tax on hair cutting or coloring.