OHIO Businesses prepare for sales tax increase

Taxi drivers and dry cleaners will charge tax for the first time.
COLUMBUS (AP) -- The newspaper ad urged car shoppers to "beat the tax man" by buying this week -- before the state sales tax increases by a penny to 6 cents next Tuesday.
After eight hours Monday, Junction Auto Sales in Chardon, east of Cleveland, had done 12 hours' worth of business, said owner Ed Babcock, who also sent 8,000 promotional letters to former customers, warning of the tax hike.
"I think this is going to be a barn-burner," he said.
Notification
Both an increase and expansion to the state sales tax are in the $48.8 billion budget that lawmakers approved Friday, sending it to Gov. Bob Taft for his signature.
The Ohio Department of Taxation on Monday mailed letters to all registered businesses that now charge the tax, saying it goes up to 6 cents July 1.
Also, the agency must notify service businesses such as taxi drivers and dry cleaners that they must start charging the sales tax for the first time, starting Aug. 1. Lawmakers last week delayed that tax change by a month at the Taxation Department's request.
"We wanted to give them more time so they can get registered and be aware of what those obligations are," said Mike Adelman, legislative administrator at the Taxation Department. "We wanted to avoid the kind of situation where somebody might be collecting it and somebody else not."
Impact?
While auto dealers or others selling big-ticket items might see a blip in sales this week and a slight dip next week, the sales tax changes probably won't affect annual sales, said Richard Levin, a partner in a tax and budget policy research firm in Columbus.
Cuyahoga County shoppers will be paying 8 percent, the state's highest sales tax, because of 2 cents in county and transit taxes. Local taxes added to the state rate average 1 cent.