What Small Businesses in Ohio Need to Know About Taxes in 2023

Small business owners in Ohio are constantly navigating the complex world of taxes. With new tax laws and regulations coming into effect each year, it can be difficult to keep up with everything that is required of them.

As we approach 2023, small businesses in Ohio need to be aware of several key changes that will affect their tax liabilities.

One major change is the implementation of a new state sales tax system. Beginning in 2023, Ohio will adopt a destination-based sales tax structure, meaning that businesses will need to charge sales tax based on where their customers are located rather than where they are physically located. This change is expected to have a significant impact on small businesses, particularly those that sell goods online or across state lines.

In addition to this change, there are several other updates and revisions to the tax code that small business owners in Ohio should be aware of as they prepare for the upcoming year.

As small businesses navigate tax regulations in Ohio for 2023, it’s crucial to understand the implications of LLC registration ohio. Failure to comply with the state’s requirements may lead to penalties or missed tax benefits.

When it comes to handling taxes in 2023, small businesses in Ohio should consider seeking assistance from the top ohio LLC service providers. These experienced professionals can provide guidance and support to ensure compliance with the latest tax regulations.

Ohio small business owners should stay informed about any changes in tax regulations that may occur in 2023 to ensure compliance and avoid any penalties. Investing time in learning about ohio small business taxes can significantly benefit entrepreneurs, especially in terms of accurately completing tax returns and maximizing eligible deductions.

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Overview Of Tax Changes For 2023

As small business owners in Ohio gear up for the new year, it’s important to stay informed about any changes to tax laws that may impact their operations.

For 2023, there are several adjustments that businesses should be aware of. One major change is the potential for new tax credits, exemptions and deductions that can help reduce overall tax liability.

These changes will have a significant impact on local economies, as small businesses play an important role in driving economic growth within their communities. By taking advantage of available tax breaks, businesses can reinvest more money back into their operations and create new jobs.

As such, it’s essential for small business owners in Ohio to stay up-to-date with these tax changes and work with a trusted accountant or financial advisor to ensure they’re maximizing their savings while remaining compliant with state and federal regulations.

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Destination-Based Sales Tax System

To begin with, let’s discuss how to collect sales tax.

As a small business owner in Ohio, you’ll need to know the rules and regulations around collecting taxes from customers in 2023.

Next, let’s talk about determining tax rates. This can be tricky, as rates vary by jurisdiction.

Finally, we should cover filing returns. It’s important to understand how and when to file so you don’t end up paying any penalties.

How To Collect Sales Tax

If you’re a small business owner in Ohio, it’s important to understand the destination-based sales tax system.

When it comes to collecting sales tax, there are certain exemptions that may apply.

For instance, if you sell products that are exempt from sales tax, you don’t have to collect tax on those items.

However, if your business is not exempt from sales tax, you’ll need to use tax compliance software to properly calculate and collect the correct amount of taxes owed based on where the sale was made.

By staying up-to-date on these regulations and using tax compliance software, you can ensure that your business remains compliant with state and local laws while avoiding any potential penalties or fines.

Determining Tax Rates

Now that you have an understanding of tax exemptions and how to properly calculate and collect sales tax, the next step is determining tax rates.

The destination-based sales tax system requires businesses to determine the appropriate tax rate based on where the sale was made.

This can be difficult as tax rates can vary from city to city or even from street to street. It’s important to stay up-to-date on these rates to avoid any potential errors or penalties.

Additionally, it’s important to consider deductible expenses when calculating taxes owed.

By deducting eligible expenses, you can reduce the amount of taxable income and ultimately lower your overall tax liability.

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Filing Returns

Now that you have a grasp on calculating and collecting sales tax rates, the next step is filing returns.

The destination-based sales tax system requires businesses to file returns in each state where they have nexus.

It’s important to stay up-to-date on state-specific regulations and deadlines for filing returns, as well as any available tax credits.

Failing to file or filing late can result in penalties and interest charges.

By properly filing returns and taking advantage of available deductions, businesses can reduce their overall tax liability.

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Implications For Online And Out-Of-State Sales

As discussed in the previous section, Ohio has transitioned to a destination-based sales tax system. This means that businesses must now collect and remit sales tax based on where the customer is located, rather than where the business is located. While this change may seem daunting, it can actually benefit small businesses by simplifying their compliance obligations.

However, small businesses with online or out-of-state sales should be aware of the implications of this new system. In order to be required to collect and remit sales tax in a particular state, a business must have nexus in that state. Nexus refers to a connection or presence in the state that is significant enough to trigger a tax obligation.

With the destination-based system, businesses may now have nexus in more states than before if they make sales across state lines. It’s important for small business owners to understand these nexus requirements and determine whether they need to register for sales tax in other states.

Additionally, there may be certain sales tax exemptions available for out-of-state sales, so it’s worth exploring these options as well.

Other Revisions To The Tax Code

In addition to the changes in tax rates and exemptions, there are also a few other revisions that small businesses in Ohio should be aware of when filing their tax return in 2023.

One such change is the expansion of certain tax credits that may benefit small business owners. For example, the Earned Income Tax Credit (EITC) will now be available to more taxpayers who have lower income levels. This could potentially provide a boost for small businesses that employ workers who qualify for the EITC.

Another revision to the tax code relates to depreciation rules for business equipment and property. Starting in 2023, businesses will be able to immediately write off the cost of certain types of property instead of having to depreciate them over several years. This change is expected to provide significant savings for small businesses, especially those that rely heavily on equipment and other assets.

By taking advantage of these revisions and properly claiming eligible tax credits, small businesses can help minimize their tax liability and keep more money in their pockets.

Tips For Small Business Tax Planning In Ohio

If you own a small business in Ohio, it’s crucial to start planning for your taxes early on.

One essential aspect to consider is tax deductions that can lower your taxable income and reduce your overall tax bill. Common tax deductions for small businesses include expenses related to office space, equipment, supplies, and employee salaries and benefits. By keeping accurate records and tracking all business-related expenses throughout the year, you can maximize your deductions and potentially save thousands of dollars come tax season.

Another important consideration for small business owners in Ohio is estimated taxes. Unlike employees who have taxes automatically withheld from their paychecks, business owners are responsible for paying their taxes on a quarterly basis throughout the year.

Failing to make these payments or underpaying could result in hefty penalties and interest fees. To avoid this, work with a trusted accountant or use IRS resources to calculate your estimated taxes each quarter based on your projected income and expenses.

This will help you stay on top of your tax obligations and avoid any unwanted surprises come tax season.


In conclusion, small businesses in Ohio must take note of the tax changes and revisions that will come into effect in 2023. The destination-based sales tax system will have implications for online and out-of-state sales, requiring businesses to carefully track their sales and taxation obligations.

It is important for small business owners to be aware of these changes so they can plan accordingly and avoid any penalties or legal issues. To prepare for the upcoming tax changes, small business owners should consult with a tax professional or accountant to ensure they are fully informed of their tax obligations.

They should also keep detailed records of all sales and purchases to accurately calculate taxes owed. By staying informed and proactive about their tax planning, small businesses in Ohio can minimize their tax liability and avoid any potential legal issues down the road.

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