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Employment, employment placement service tax repealed Oct. 1

Written on Sep 2, 2021

Employment and employment placement services will no longer be taxable in Ohio beginning Oct. 1 as a result of Ohio’s biennium budget bill signed into law this summer. Employers’ estimated savings will be more than $300 million through Ohio’s Fiscal Year 2023 (ending June 30, 2023). 

House Bill 110 eliminates from the sales and use tax employment services (providing personnel to perform work under the supervision and control of the purchaser) and employment placement services (locating employment for a job seeker or locating job candidates for an employer). OSCPA first recommended eliminating the taxability of these transactions in our 2016 Ohio Tax Reform Task Force report.  

In a sales and use tax alert released on Aug. 30, the Ohio Department of Taxation noted that if an employment services provider or employment placement service provider performed these taxable services or billed for the taxable services before Oct. 1, 2021, the sales or use tax should still be applied; invoices issued after Oct. 1 for services performed before that date should include the tax. 

On a related note, ODT said the following information releases will be archived at the end of October.