Next time you make an online purchase take a look at your receipt. Did the vendor charge you any sales tax? If not, you are responsible for remitting the use tax for the purchase. A use tax is similar to a sales tax in its purpose. Just like sales tax, use tax has exemptions- items that are not taxed. Purchases that are properly exempt from sales tax are also exempt from use tax. Use tax must be paid on all purchases made by Ohio residents and businesses if the proper amount of sales tax has not been paid to the vendor, seller, or service provider. The use tax rate is equal to the sales tax rate in effect in the county where the property is used or the benefit of the service is received by the purchaser.
The most common situation that gives rise to a use tax liability is when an Ohio customer makes an internet purchase from an out-of-state seller. If the seller is not located in Ohio and does not have substantial nexus with Ohio, the seller is not required to collect and remit Ohio sales tax. The responsibility becomes yours as the consumer. This happens frequently where purchases are made through small vendors online.
Many out-of-state sellers are registered with the State of Ohio for the collection and remittance of the sales tax. If your business makes regular purchases upon which the proper amount of sales or use tax is not collected by the seller, you should apply for a consumer's use tax account with the Department of Taxation and begin filing use tax returns.
If the purchases are less frequent, you can make a voluntary payment of the tax by sending a payment of the amount due to the Ohio Department of Taxation along with a description of the purchases made and the dates of purchase. A voluntary payment form VP USE is available on our Web site at Tax Forms. Use tax on purchases by an individual can also be paid on the Ohio individual income tax return.