Sales Tax Articles
Sales Tax State Activity Update - March 2007
Ohio Clarifies Services
The Ohio Department of Taxation has revised Information Release1993-08 - Employment Services, the purpose of which is to clarify the law. Specifically, this revised release as of February, 2007 provides information on the changes to the definition of "employment service" found in R.C. 5739.01(JJ) as amended by House Bill 293, effective January 1, 2007.
Section 5739.01(B)(3)(k) of the Ohio Revised Code ("R.C.") includes within the definition of a "sale" and "selling" the providing of an employment service. As amended by House Bill 293 of the 126th Ohio General Assembly, effective January 1, 2007, employment service is defined in R.C. 5739.01(JJ) as:
. . . providing or supplying personnel, on a temporary or long-term basis, to perform work or labor under the supervision or control of another, when the personnel so provided or supplied receive their wages, salary, or other compensation from the provider or supplier of the employment service or from a third party that provided or supplied the personnel to the provider or supplier.. "Employment service" does not include: |
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Acting as a contractor or subcontractor, where the personnel performing the work are not under the direct control of the purchaser.
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Medical and health care services.
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Supplying personnel to a purchaser pursuant to a contract of at least one year between the service provider and the purchaser that specifies that each employee covered under the contract is assigned to the purchaser on a permanent basis.
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Transactions between members of an affiliated group, as defined in division (B)(3)(e) of this section.
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Transactions where the personnel so provided or supplied by a provider or supplier to a purchaser of an employment service are then provided or supplied by that purchaser to a third party as an employment service, except "employment service" does include the transaction between that purchaser and the third party.
The release contains numerous examples of the above exclusions and to a lesser extent some examples of taxable employment services.
This full text may be viewed on the Ohio Department of Taxation website.
(Ohio Department of Taxation, Information Release1993-08 - Employment Services, Revised 02/07, effective 01/01/2007)
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