Off-Premises Alcoholic Beverage Sales not Exempt from Ohio Sales Tax
By Jonathan C. Wolnik
In response to one of Governor DeWine’s executive orders regarding the pandemic, the Ohio Liquor Control Commission permitted certain liquor permit holders to sell beer, wine, mixed beverages and spiritous liquor for off-site consumption. The goal of this action is to assist restaurants and taverns with maintaining sales through carry-out or delivery options while their establishments are closed to the public. Though the carry-out and delivery option opened new opportunities for certain businesses to sell alcoholic drinks, the sales tax obligations have not changed.
The Ohio Department of Taxation recently issued a notice reminding tavern-owners and restaurateurs that liquor permit holders are required to collect sales tax on the sale of alcoholic beverages, including those alcoholic beverages sold for off-site consumption. Alcoholic drinks (containing greater than one-half of one percent (0.5%) or more of alcohol by volume) do not qualify as food and therefore are not exempt from Ohio sales tax under the carryout exemption. Establishments selling such drinks for off-site consumption, must charge, collect, and remit the appropriate sales tax. The business should maintain detailed supporting records to document sales and prove the collection and remittance of sales tax. Accurate, complete, and timely transaction detail is critically important when defending a sales tax audit.
Please contact one of McCarthy Lebit’s tax attorneys to discuss this article or other opportunities for relief available in response to the COVID-19 crisis. Our attorneys are prepared to discuss the various small business loan options, federal and state tax relief, and other operational strategies to help guide you and your business through the current challenges facing our nation.
Jonathan C. Wolnik is an attorney at the Cleveland, OH-based law firm of McCarthy, Lebit, Crystal & Liffman
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