Ohio Nexus

Read below for a simple and concise explanation of Ohio Nexus

Substantial Nexus

This is established when a seller has sufficient economic connection to the state. In Ohio, substantial nexus is determined by meeting one of the following thresholds in the current or preceding calendar year:

  • Sales Threshold

    Exceeding $100,000 in gross receipts from sales of tangible personal property delivered to Ohio for storage, use, or consumption.

  • Transaction Threshold

    Having 200 or more separate transactions for sales delivered to Ohio.

If a seller meets either threshold, they are required to:

  • Register for a seller’s use tax license with the Ohio Department of Taxation.
  • Collect sales tax on taxable sales made to Ohio customers.
  • File sales tax returns and remit the collected tax to the state.

Physical Nexus

A seller has a physical presence in Ohio if they have employees, inventory, or an office in the state. Any business with a physical presence in Ohio and making taxable sales must register for a seller’s use tax license, regardless of sales volume.

Here are some additional points to consider:

  • Marketplace Facilitators: Online marketplaces that facilitate sales from third-party sellers may be responsible for collecting and remitting sales tax on behalf of the sellers if the marketplace meets the substantial nexus thresholds.
  • Sales Tax Threshold Only Applies to Remote Sellers: The sales and transaction thresholds only apply to out-of-state sellers. Businesses with a physical presence in Ohio must register for a seller’s use tax license regardless of their sales volume.
  • “Cookie Nexus” is Not Currently Enforced: Ohio previously considered placing cookies or other software on a customer’s device in the state as a form of physical presence, but this is not currently enforced.

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