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# 7790b - OHIO: SALES TAX AND RENTAL EQUIPMENT
This is a facsimile of a letter from the Ohio Department of Taxation
July 9, 1999
Re: Ohio Sales & Use Tax
Dear Mr. Garling:
This is written in response to your letter of July 6, 1999 concerning the tax rate to be charged on the rental of equipment under certain circumstances.
Q-1: If a customer picks up the rental equipment at the dealer's business location, in what county is the sales tax charged?
A-1: The tax rate to be charged by the dealer is the rate in effect at the dealer's business location during the rental period. The consumer may owe additional use tax if the item is used in a county with a higher tax rate. The additional use tax would be paid by the consumer through a consumer's use tax account. NOTE: If there is a tax rate change between rental charges (i.e., 5.75% for the May rental charges then 6% for the June rental charges), the dealer must charge the different rates for the different rental periods.
Q-2: If the rental equipment is delivered to the work site in another county, in what county is the sales tax charged?
A-2: Same answer as question 1.
Q-3: If the customer picks up the rental equipment at the dealer' s location for use in another state, in what state is the sales tax charged?
A-3: If the price for the entire rental period is paid "in full" at that time the item is picked up by the consumer, Ohio sales tax would apply to the entire rental charges at the tax rate in effect for the dealer' s county. If the price is only paid "in part" at the time the item is picked up by the consumer, Ohio sales tax would apply to only that part of the price paid at the time the item is picked up at the tax rate in effect for the dealer's county. If none of the price is paid at the time the item is picked up by the consumer, Ohio sales tax would be due when the first rental fee is paid and it would be paid at the tax rate in effect for the dealer's county with the balance of the rental payments being exempt from the Ohio sales or use tax. The rental fees charged while the item is being used outside of Ohio may be subject to sales or use tax in the state where used.
Q-4: If the rental equipment is delivered to the work site in another state, in what state is the sales tax charged?
A-4: Since the consumer has not taken possession of the rental item in Ohio, Ohio sales or use tax would not apply unless the item is returned to Ohio and used in Ohio by the consumer during the rental period. The rental charges may be subject to sales or use tax in the state where the item is used during the rental period. I hope I have responded to your questions. If you need additional information, please feel free to contact me at any time.
Sincerely,
To view the letter concerning tax status of rental equipment, click here.