The sales tax on employment services has officially been repealed with Gov. Mike DeWine signing the state’s budget legislation, according to a report from law firm Vorys, Sater, Seymore and Pease LLP. The sales tax repeal will take effect Oct. 1. The Ohio office of the governor has confirmed the tax will go away.
“In anticipation of the October effective date, businesses should now consider how the tax repeal affects their tax planning, compliance and operations,” according to Vorys.
The sales tax had been in place since 1993.
Ohio companies could save more than $300 million over the course of the next two years with the repeal, according to a blog post by the Ohio Chamber of Commerce, which had been pushing for the removal of the tax.
“Ohio is one of only a few states that require sales tax on the contract of staffing provided to third parties to meet temporary needs of those third-party businesses,” according to the blog post by the chamber. “The current tax is nothing more than an onerous and outdated tax that raises the cost of creating jobs.”
The repeal was welcome, said Jay Lucarelli, CEO of Minute Men Staffing Services, a staffing firm headquartered in Cleveland.
“It really was a tax on jobs,” Lucarelli said. “It is a huge deal for our customers.”