Ohio Sales Tax on Invoices: A Practical Guide
Last verified: · Verify with the Ohio Department of Taxation before relying on a specific rate.
Ohio has a moderate state base sales tax rate (5.75%) layered with mandatory county sales tax additions, taxable SaaS, and an enumerated services list that catches more than most large states but less than Texas. The state also runs a separate Commercial Activity Tax (CAT) on business gross receipts that's often confused with sales tax. This guide separates the two and covers what small businesses need to know.
The headline rate
Ohio's state sales tax is 5.75%. All 88 Ohio counties levy an additional county sales tax (mandatory, not optional), with combined rates ranging from 6.5% to 8.0%. Cuyahoga (Cleveland), Franklin (Columbus), and Hamilton (Cincinnati) sit at the higher end. Use the Ohio DOT's Sales Tax Rate Chart for current rates by county.
Do you need to register?
Ohio-based businessesselling taxable goods or services must register for an Ohio Vendor's License before making taxable sales.
Out-of-state sellers must register and collect Ohio sales tax once they exceed $100,000 in Ohio sales OR 200 separate transactionsin the previous calendar year. The "OR" test triggers nexus on either threshold.
What's taxable, what isn't
Ohio taxes tangible personal property and an enumerated list of services in Ohio Revised Code §5739.01(B). Notable for invoicing:
- SaaS and prewritten software: taxable. Custom software is exempt.
- Data processing and electronic information services: taxable.
- Building maintenance, janitorial, exterminating, landscaping, lawn care, snow removal: taxable as enumerated services.
- Most professional services: NOT taxed. Accounting, legal, consulting, design, photography services, freelance work — all exempt.
Frequently asked questions
What is Ohio's state sales tax rate?
Ohio's state sales tax rate is 5.75%. All 88 Ohio counties levy an additional county sales tax of 0.75% to 2.25%, making combined rates range from 6.5% to 8.0%. Cuyahoga County (Cleveland), Franklin County (Columbus), and Hamilton County (Cincinnati) sit at the higher end of the range. Ohio Department of Taxation publishes the current combined rate by county in their quarterly Sales Tax Rate Charts.
What's Ohio's economic nexus threshold?
Ohio requires out-of-state sellers to register and collect Ohio sales tax once they have $100,000 or more in Ohio sales OR 200 or more separate transactions in the previous calendar year. The 'OR' test means either threshold triggers nexus. Ohio retains the 200-transaction prong (which some other states have dropped). Once over the threshold, the seller registers, collects at the customer's destination rate, and remits monthly.
Is SaaS taxable in Ohio?
Yes, in most cases. Ohio taxes prewritten computer software, including SaaS and cloud computing services delivered to Ohio customers. Custom software developed for a single customer is generally not taxable. The taxability of digital advertising services has been litigated separately and remains contested in some contexts. For invoicing purposes, SaaS providers should apply the customer's destination-county combined rate (6.5% to 8.0%) to subscription line items.
Does Ohio tax services?
Ohio taxes a specific list of services in Ohio Revised Code §5739.01(B). Notable taxable services: data processing, automatic data processing, electronic information services, telecommunications, employment services, building maintenance and janitorial services, exterminating services, landscaping and lawn care, snow removal, and certain personal services. Most professional services — accounting, legal, consulting, design, freelance work — are NOT taxed. The list is more extensive than Illinois or Florida but narrower than Texas.
How do I claim an Ohio resale exemption?
B2B sales to Ohio-registered resellers can be exempt with a valid Ohio Sales and Use Tax Blanket Exemption Certificate (form STEC B) on file. The seller retains the certificate and applies zero tax on qualifying sales. The invoice should reference the buyer's Ohio Vendor's License Number and note 'Sale for resale; Ohio STEC B on file.' Ohio also accepts the multistate Streamlined Sales Tax (SST) Exemption Certificate.
What's the difference between Ohio's CAT and sales tax?
Ohio Commercial Activity Tax (CAT) is a separate gross-receipts tax owed by Ohio businesses on annual gross receipts above $3 million (a 2024 increase from the prior $1 million threshold). It's a business-level tax, not a transaction tax — calculated on the seller's annual gross receipts, not on individual sales. CAT is filed annually with the Ohio Department of Taxation. Sales tax is a transaction tax owed by buyers and collected by sellers; CAT is an entity-level tax owed by the seller.
Where can I verify Ohio sales tax rates and rules?
Ohio Department of Taxation at tax.ohio.gov — the official tax authority. Look for: the quarterly Sales Tax Rate Chart (current rates by county), Information Release ST 2003-01 and subsequent updates on remote-seller obligations, and the Ohio Business Gateway (OBG) for registration and filings. The Department also publishes 'Tax Tip of the Month' guidance for common questions.
Sources
This page is general information, not tax advice. For specific transactions, consult an Ohio-licensed CPA or request a private letter ruling from the Ohio Department of Taxation.