Ohio Sales Tax is Due When the Invoice is Created, Not When it is Collected

I know this going to come as a surprise to many businesses in Ohio that are responsible for collecting sales taxes...

Your sales taxes are due to the state based on when you invoice for them, NOT when you collect the taxes from your customers. In "accounting-speak", this means that the taxes are due on the accrual basis (when invoiced), not on the cash basis (when paid by your customer).

Skeptical? Take a look at the FAQ page from the Ohio Dept of Taxation.

In the event that your customer does not ultimately pay the sales tax you have advanced to the state, there are methods available to recover that tax.

I feel your pain. I hear the question all the time - "why should I have to pay the state before I get paid?"

Thought you should know about this...please don't shoot the messenger.

_________________________________________________________________________________________

Scott Gregory provides CFO and controller services to service, manufacturing and distribution businesses in Northeastern Ohio.

He is very fluent in the following dialects often heard yet rarely understood by business owners:

• "Accounting-speak"
• "IT jargon"
• "Inventory gobbledygook"
• "Banking banter"
• "Internet and e-commerce cyberbabble"

Put his twenty-five years of experience to work in your business. Contact Scott today.

Comments

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[Cary real estate]

Ohhhhh. It's very pathetic - sales tax - income tax - and so on. Very pathetic. What is the need of these things? - It's a big question in our mind. But the solvent of this question is given in this blog. Thanks.

[homes charlottesville virginia]

This is a great post about tax........
This site is very informative ........
This information may be help the people like me.......
I think you must be payed the sales tax for the future benefit......
Thanks for sharing this informative article......

[Shop taobao]

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[invoice format]

In my opinion, it does not make any difference whether you pay the sales tax at the time invoice is created or when it is closed. The main crux is that you have to pay the tax and it would be in your benefit.