In Ohio, sales tax exemption applies to certain types of food, some building materials, and prescription drugs. Many states have special, lowered sales tax rates for staple goods such as groceries, clothing, and medicines. Restaurant meals may also have a special sales tax rate.
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Goods subject to sales tax in Ohio are physical property like furniture, appliances, and motor vehicles. Prescription medicine, groceries, and gasoline are tax-exempt.
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Ohio uses a 5.75% state-wide sales tax rate, with additional local taxes ranging from 0.75% to 2.25%. Different areas have varying tax rates, such as Wayne County charging 6.5% and Cleveland charging 8% with the maximum local tax included.
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Tangible products are generally taxable in Ohio, with some exceptions. Services like plumbing and freelancing are not taxed, but digital products such as apps and streaming services are.
Tax exemption means income or a transaction is not subject to tax. Tax exemption can also refer to organizations like churches that do not pay taxes. Tax-exempt organizations vary from charities to religious ones, each with their own rules and regulations.
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Tax exemptions can apply to various situations, such as charitable organizations being designated tax-exempt by the IRS or items being exempt from sales tax. Rules for tax exemptions differ by location and understanding them can help in maximizing returns.
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Individuals or organizations can pay less tax if they are deemed tax-exempt. Becoming tax-exempt requires meeting eligibility criteria and filing an application, resulting in a reduced tax burden.
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Tax exemption allows specific individuals or groups to be exempt from taxes. Eligible entities include non-profits, charities, religious institutions, and certain schools, but the criteria for exemption can be intricate.
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Exempt income is income that is not subject to tax, like interest from certain savings accounts or municipal bonds. Specific rules dictate what qualifies as exempt income.