Shop Talk

State of Ohio Eliminates Sales Tax on Employment Services

In July of this year, Mike DeWine signed Ohio’s budget legislation (House Bill 110) which officially repealed sales tax on employment services. The taxation of employment services & placement services has been the subject of controversy for almost 30 years and this repeal is viewed as a major win for employers across numerous industries in Ohio!

House Bill 110 includes numerous pro-business policy initiatives that will help improve Ohio’s business climate. By eliminating the taxation of these services, Ohio becomes a more business friendly state and continues to encourage economic growth.

Before the repeal, Ohio was one of the only states that required sales tax on employment services. This proved to be an unnecessary added cost that resulted in hiring issues and job creation for employers throughout the state. Now, companies are estimated to save more than $300 million over the course of the next two years, according to the Ohio Chamber of Commerce, who has been a major supporter of the tax removal.

As of October 1st, the repeal has gone into effect. Here are some items to consider…

  • Companies should look at the tax savings as a way to increase headcount. In some cases, the savings could be into the thousands and millions of dollars. With this money freed up, it would allow for continued growth and expansion of your business
  • If job creation isn’t a reality, look at your current wage structure and benefits plan and if each needs improvement
  • In addition to job creation, wages & benefits, think about using the money saved for capital investment’s along with R&D efforts
  • Organizations should also review their staffing/recruiting agreements for possible reductions in negotiated fees to ensure tax is no longer charged on employment services

Rust Belt Recruiting is ecstatic for what this means for our manufacturing partners! We’ve been proponents of this change for years now and are excited for the positive outcomes that will come of this new legislation.

Written by Rust Belt Recruiting’s Vice President of Sales, James Smith.
Connect with James on LinkedIn to learn more about industry trends, recruitment services, and partnering opportunities.