Module 4: Sales of Services
1. The enumeration rule (ORC 5739.01(B)(3))
Services are only taxable if they are specifically named in the law. If it is not on the list, it is exempt. This is the opposite of tangible personal property (Module 3), where the default is taxable.
2. Scope of this module
- Which services Ohio explicitly taxes vs. exempts
- Electronic information services (EIS) and SaaS/hosting treatment
- Bundled labor + materials transactions
- Threshold rules (e.g., landscaping/snow removal $5,000 floor)
- Professional vs. maintenance vs. data-processing categories
3. Core taxable services
- Property Maintenance: Landscaping, lawn care, snow removal (mechanized), and janitorial services.
- Professional Services: Private investigation, security, and employment placement.
- Information Services: Automatic data processing and computer services provided for business use.
4. 2026 major revenue shift
- EIS 25% Refund Repeal: Effective Jan 1, 2026, the 25% refund of sales tax paid by providers of "Electronic Information Services" (SaaS/Data Hosting) is repealed. This forces the tech sector to contribute significantly more to the revenue pool.
5. Operational gap
The $5,000 threshold for landscaping/snow removal creates a massive untaxed "shadow economy" that the state cannot track, leading to significant revenue leakage.