Key figures
Ohio receivables
2026, with sources
Business-use SaaS is taxable
Ohio is one of the states that taxes SaaS sold to businesses. Its sales tax applies to automatic data processing, computer services and electronic information services when they are provided for use in business; the test is whether the true object of the transaction is to receive those services rather than a professional service they support. A subscription a consumer buys for personal use is generally not taxable.
That makes the customer’s use part of the invoice logic. A company selling the same plan to freelancers and to businesses needs to know which is which, or collect on all of it and handle exemption claims.
Nexus and collection
A remote seller has to register and collect once it has more than $100,000 of gross receipts from Ohio sales, or 200 or more separate Ohio transactions, in the current or preceding calendar year. The transaction count still counts in Ohio, which matters for low-price, high-volume SaaS: 200 customers at $20 a month crosses the line long before $100,000 does.
Ohio’s state rate is 5.75%, with county and transit authority rates on top. Returns are filed through OH|TAX eServices on a frequency the Department assigns.
Receipts and the CAT
Revenue also matters to the CAT, which taxes Ohio-sitused gross receipts above $6 million a year at 0.26%. For a startup this is a forecasting question rather than a filing one: the year Ohio receipts are expected to cross $6 million, the company reopens a CAT account and starts quarterly returns.
The federal baseline
This page covers what Ohio adds. The federal rules underneath it apply here too.
Common questions
Is our SaaS taxable in Ohio?
When the customer uses it in its business, generally yes. Ohio’s sales tax reaches automatic data processing, computer services and electronic information services provided for use in business, and most B2B SaaS falls into one of those. The same subscription sold to a consumer for personal use is generally not taxable. Collecting depends on nexus: more than $100,000 of Ohio sales or 200 separate transactions.
Which rate do we charge an Ohio customer?
Ohio’s county and transit rates are added to the 5.75% state rate, and a remote seller collects based on where the customer receives the service. Ohio is a member of the Streamlined Sales and Use Tax Agreement, so certified service providers can handle the rate lookup.
Receivables next door
- INIndiana receivablesIndiana charges a flat 7% with no local rates, counts only $100,000 of sales toward nexus since 2024, and doesn’t tax remotely accessed SaaS.
- KYKentucky receivablesKentucky charges a flat 6% with no local sales tax, taxes SaaS as a prewritten computer software access service, and since August 1, 2026 requires remote sellers to register on $100,000 of gross receipts alone.
- MIMichigan receivablesMichigan charges a flat 6% with no local rates, counts 200 transactions toward nexus, and generally doesn’t tax remotely accessed SaaS.
- PAPennsylvania receivablesPennsylvania taxes SaaS at 6%, with 7% in Allegheny County and 8% in Philadelphia, and requires remote sellers to register once sales pass $100,000.
- WVWest Virginia receivablesWest Virginia’s 6% sales tax reaches many services and prewritten software, while electronic data processing is exempt, so SaaS depends on what it does. Remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
More of the Ohio guide
- AccountingAccounting and state tax in OhioCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in OhioPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in OhioWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in OhioRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in OhioCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.