or outofstatesellerfrom aconsumeron behalf of ataxingjurisdiction areexcludedfrom
thedefinitio n of a“gross receipt”for purposes of theCAT. In addition, thevendor or out
ofstate seller is not required to subtract any discounts earned when calculating this
exclusionary amount because the exclusion is for the amount of tax collected. For
example, avendor sells acarfor $20,000toan Ohio resident andalso collects $1,400in
Ohio sales tax. Thevendor is only requiredto reportgross receipts of $20, 000(t heprice
paidfor thecar) for purposes of theCAT. The $1,400of Ohio tax is not subject to the
CAT. In addition, taxes that a taxpayer is required by law to collect directly from a
purchaser and then remit to a local, state, or federal taxing authority may be excluded
from the taxpayer’s gross rece ipts. For example,a wireless telephone company collects a
tax for E911service directly from its customer. Thecompany is r equiredby lawto remit
thepayment toagovernmentaltaxingauthority. Thecompany may excludethis amount
from its gross receipts, as this amount is required to be collected directly from the
customer (and is not imposedon thecompany, itself) and must bere mittedto ataxing
jurisdiction.
• Certain excise taxes paid – (R.C. 5751.01(F)(2)(q) to (s)) – Receipts from the sale of
cigarettes or tobacco products, motor fuel, and beer or intoxicating liquor aregenerally
subject to theCAT. However, thefederal andstate excisetaxes may bedeductedon the
receipts received from thoseproducts, including excisetaxes collectedand remittedon
cigarettes, beer and wine for the construction or renovation of certain sports facilities.
Because motor fuel is excludedpursuant to atemporary lawprovision, no deduction is
allowedonmotor fuel untilJuly 1, 2007. Whendeterminingtheexcisetaxes that can be
deducted, thedeductionis only fo r theportion of federal andstat eexcisetaxes received
fromthese products during the taxable period. For example, assumea beer wholesaler
purchases 10,000 cases of beer duringthetax period, butonly sells 8,000 cases during
that tax reporting period. The wholesaler can only deduct from its gross receipts the
federal andstateexcisetaxes on the8,000cases actually soldduringtherepo rtingperiod.
Thereceipts from theremaining2.000cases will beclaimedby thewholesa lerwhenthe
cases areultimately sold. An informationrelease and/or rule will be issued concerning
the current federal and state excise tax rates. This Department will issue a separate
information releasethat provides t heexcisetax rates andfurtherclarifies this exclusion
for certain excisetaxes paid.
• Saleor transfer of motor vehicleas customer preference –(R.C. 5751.01(F)(2)(t) –To
theextent areceipt is realizedfor thesaleor transferof a motor vehiclefrom onedealer
to another for t he purpo se of resale by the second dealer, the gross receipt shall be
excluded from the transferordealer’s calculation of gro ss receipts for purposes of the
CAT ifandonlyif thesaleor transferwas made tomeet aspecificcustomer’s preference.
It is strongly advised that such transfer be documented by both dealers to verify such
transferis excludedfrom theCAT uponinspection/auditby this Departme nt. Aform that
dealers are strongly advised to use will be available on the department of taxation’s
website at tax.o hio.gov. It is important to note that receipts from transfers between
dealers other thanfor customer preferenceare subjecttotheCAT.
• Receipts from a financial institution described in R.C. 5751.01(E)(3) for services
provided to the financial institution in connection with the issuance, processing,
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