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Reasons for Exemption From Sales Tax in Ohio

The legislature of the state of Ohio enacted the state's sales tax law as a means of generating revenue to fund specific purposes including maintaining common schools, supporting local governments and for meeting the general revenue needs of the state. The state defines a taxable sale as one in which the possession of or title to any tangible personal property is transferred for a price. A taxable sale may also refer to a benefit of services provided for a price. All such sales transactions are subject to the payment of sales tax unless exempted by Ohio law.

Nonprofit Organizations

Certain nonprofit organizations are exempt by Ohio state law from the requirement to pay Ohio sales tax. To meet Ohio's requirements, the nonprofit organization must be operated for specific charitable purposes. According to the Ohio Department of Taxation, these purposes may include poverty relief, health care to the sick or injured including providing professional services exclusively to health care institutions. Organizations that operate noncommercial, educational television or radio stations may be exempt from sales tax.

Organizations that operate certain homes for the elderly may be exempt. Nonprofit humane societies and animal shelters may be exempt from paying sales tax. Certain educational institutions are exempt from paying sales tax if they meet state requirements for faculty, courses of study and graduation. Also, groups organized to support or promote the educational and extracurricular activities of a qualified educational organization may be exempt. Organizations involved in the performing arts may be exempt from sales tax.

Government Agencies

The state of Ohio exempts agencies of the U.S. government from paying sales tax on items purchased in the state. Purchases made by the state of Ohio as well as any of the state's political subdivisions and agencies are exempt from sales tax. Sales of goods or services to other states, their agencies and political subdivisions are exempt from sales tax, provided those states provide reciprocal sales tax exemption to Ohio, its agencies and political subdivisions.

Specific Items

The state of Ohio exempts certain specific items from sales tax. According to the Ohio Department of Taxation food that is purchased for off-premise consumption is exempt from sales tax. This provision does not include soft drinks, tobacco, dietary supplements or alcohol. Food provided to employees without charge as part of their compensation is exempt from sales tax.

Magazine subscriptions, newspapers and other unbound publications are exempt from sales tax. Prescription drugs and certain other health-care-related paraphernalia such as diabetic supplies are exempt from Ohio sales tax. Items purchased for resale in their existing form may be exempt.

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