As an update to our March 7, 2016, post “Ohio Clarifies Growing Tax Scope for Online Services and Internet Access,” on July 14, 2016, Ohio passed HB 466 that will exempt certain digital advertising services from Ohio sales and use tax. These services include those that provide access, via telecommunications equipment, to computer equipment that is used to enter, upload, download, review, manipulate, store, add or delete data for the purpose of electronically displaying promotional advertisements to potential customers, e.g., a website used by a business to list and advertise their inventory online.

The exemption will be effective 91 days after filing with the Secretary of State, and applicable on the first day of the first month that begins at least 30 days after the effective date of the legislation. We anticipate that effective date to be December 1. We do not believe this will change any audit determinations for periods prior to the law change. However, keep in mind that the proposed legislation does not change the definition of EIS and therefore does not affect any services except those related specifically to digital advertising.

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Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.