State & Local Tax Blog

Whiplash In Ohio As They Switch Back To Origin Based

On April 25, the Ohio Department of Taxation issued a press release about a recent bill signed by the Governor switching back to sourcing sales at the origin instead of destination. You may recall that Ohio swiched to destination sourcing back in 2006 in an effort to become a full member of the Streamlined Sales Tax Project (SSTP).

The SSTP is a multi-state effort to simplify and standardize sales tax rules across state lines. For years, the multistate group required states to move to destination sourcing in order to become full members. Ohio got on board and passed their law to change to destination sourcing. This caused a big problem for delivery sellers like furniture and appliance stores. Suddenly all of them had to put in systems to charge tax based on the tax rate of the delivery.
Now, last summer, in response to concerns from small businesses (according to the press release), the Ohio General Assembly put the shift to destination sourcing of delivery sales on hold. Later, in December, the Governing Board of the Streamlined Sales Tax Project decided to allow “origin states” to become a full member of the organization starting in 2010 as long as at least four other “origin states” are also ready to become full members. So now, Ohio has moved back into the origin camp.

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