Amongst Ohio’s taxable services are electronic information services, defined in R.C. 5739.01(Y)(1)(c) as providing access to computer equipment through telecommunications to either:
- Examine or acquire data stored in or accessible to the computer equipment; or
- Placing data into computer equipment to be retrieved by designated recipients with access to the computer equipment.
In Marc Glassman, Inc. v. Levin 119 Ohio St.3d 254, 2008-Ohio-3819, we successfully persuaded the Ohio Supreme Court electronic information services does not include a service providing merely conclusive answers communicated from a third party. However, the Department of Taxation is now taking the position that a taxable service includes inventory advertising when the vendor has access to control the data within the computer equipment (i.e., Cars.com / Autotrader.com), online chat features (allowing vendors to communicate instantly with potential customers), and mass emails services where the customer can upload mailing lists. Information Release ST 1999-04 (Updated Dec. 2015). Although, we believe these services are predominately personal/professional services that are now being delivered through ancillary electronic means, the Department feels to the contrary. Caution and proper planning can minimize your tax base and avoid a substantial surprise during an Ohio use tax audit.
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