Sales Tax Removed from Employment Services Contracts

For many years, the idea of removing the sales tax on the service of providing supplemental workforce seemed as futile as rolling a boulder up a hill. But, unlike Sisyphus, the hard work finally paid off when the state budget was signed on June 30 by Governor Mike DeWine. The budget (HB 110) includes language that removes the sales tax on employment services. For many general assemblies, the Ohio Chamber pursued this goal. This year, repeal of the tax was added as an amendment while HB 110 was under consideration in the Ohio Senate. Senator Mark Romanchuk was a tireless advocate for removing this counterproductive tax on hiring, and the Senate leadership obviously agreed. The language made it through the negotiations of the conference committee and review by the administration and potential veto pen.

Starting October 1, 2021, employment service contracts will no longer be subject to Ohio’s sales tax. This will place Ohio in the mainstream of states and allow Ohio to compete for more investment and projects and lower the cost of providing manpower in many business sectors. This change in the sales tax law is a big win for the business community and demonstrates the Ohio Chamber’s commitment to champion free enterprise.