Sourcing sales is critical to determine the appropriate jurisdiction and tax rate for Ohio sales tax collection purposes. Recently, the Ohio Department of Taxation revised Information Release ST 2009-03 to reflect that sales facilitated by “marketplace facilitators” are sourced to the destination of the sale – i.e., the location where the consumer receives the tangible personal property or service, regardless of where the marketplace facilitator or seller is located. Marketplace facilitators, like Amazon, eBay, Etsy, etc., are entities that operate a marketplace to facilitate sales on behalf of third-party sellers and are obligated to collect tax on facilitated sales delivered to Ohio locations (assuming the marketplace has nexus by virtue of exceeding $100,000 in Ohio sales).

On the other hand, intrastate sales are sourced to the origin of the sale. This means a marketplace facilitator’s direct sales are sourced to the location where the order is received, if the order is received in Ohio. This chart released by the Department summarizes how sales are sourced depending on the type of transaction. Businesses making sales to Ohio customers should review how sales are sourced to ensure they are collecting the proper local sales tax rate.