Ohio Confirms Noncompliance With Streamlined Sales Tax Sourcing Rules

The Ohio Department of Taxation has confirmed that the anticipated change to destination sourcing for all delivery sales January 1, 2008 will not go into effect. As a result, all vendors currently permitted to source delivery sales on an origin basis may continue to do so. Only vendors that have previously either switched voluntarily to destination sourcing, or that were required to switch due to having made $30 million of delivery sales in Ohio in calendar year 2005, must continue to use the destination sourcing provisions. ( Ohio Tax Information Release ST 2007-03, 10/01/2007 .)

Election. As in the past, vendors who wish to adopt the destination sourcing provisions may irrevocably elect to do so at any time. There is no formal notice requirement but a change should be made at the beginning of the vendor's tax return period (monthly or semi-annual).

Out-of-state sellers. Out-of-state sellers that collect Ohio tax continue to collect tax on a destination basis.

Telecommunications. Telecommunications service providers that source their sales under Ohio Rev. Code Ann. § 5739.034 continue to source their sales in that manner.