Use Tax
and
Contractors
C
ontractors like all other taxpayers, owe use tax
on their untaxed purchases of tangible personal
property used in Ohio (see Table 1). Contractors
also owe use tax on untaxed purchases of certain tax-
able services provided to the contractor in Ohio (see
Table 2). In addition, contractors have an added respon-
sibility of paying tax on the purchases used to fulfi ll
their real property contracts (see Table 3).
Ohio law provides that contractors are consumers
of the tangible personal property that they install into
real property. As the consumer, the contractor is re-
sponsible for paying sales or use tax on the purchase
of the tangible personal property to be installed. If a
contractor does not pay Ohio sales tax on the tangible
personal property to its supplier, then it generally owes
use tax when it uses that tangible personal property in
Ohio. The use tax will need to be remitted directly to
Ohio by the contractor.
If a contractor is installing tangible personal prop-
erty as part of a contract and that property remains
tangible personal property after installation, then the
contractor is not the consumer of the tangible personal
property. In this situation, the contractor is selling tan-
gible personal property and should charge sales tax
unless the customer is an exempt entity or provides a
fully-completed exemption certifi cate. The contractor
may purchase the tangible personal property exempt
from sales tax in this situation as a sale for resale.
What is subject to Use Tax?
The lists below are not all-inclusive and provide only
a basic knowledge of what items are subject to use tax.
In general, the following are examples of tangible
personal property subject to use tax:
Table 1
Computers, monitors,
Offi ce Equipment: printers, scanners, fax
machines, staplers
Paper, tape, business cards, calendars, envelopes,
Offi ce Supplies:
folders
Desks, chairs, tables, lamps, televisions, DVD
Furniture:
players
Mops, brooms, cleansers, paper towels, gloves,
Cleaning Supplies:
buckets
In general, the following are examples of services
subject to use tax:
Table 2
Installation Snow removal
Repair Janitorial and maintenance
Employment Storage
(temporary labor)
Lawn care and Maintenance contracts
landscaping
Exterminating Employment placement
Automatic data Motor vehicle towing
processing