Ohio manufacturers may be able to capture significant savings through the state’s manufacturing sales tax exemption, but only if purchases are properly classified, documented and reviewed. Recent guidance highlights how Ohio’s manufacturing sales tax exemption can apply to purchases used primarily in qualifying production operations, including machinery, consumables, materials handling equipment and certain utilities.

The article highlights several areas where manufacturers can miss savings or create compliance risk, including utility exemptions that require a usage study, repair and replacement parts for production equipment, and dual-use equipment that must be evaluated under Ohio’s “primary use” test. The guidance also notes that companies may be able to seek refunds for sales tax paid on qualifying purchases within a four-year lookback window.

“Ohio’s manufacturing sales tax exemption can be a real bottom-line issue, but only if companies are applying it correctly,” said Jacob Sargent, director of public policy services for the Ohio Manufacturers’ Association. “Manufacturers should periodically review major equipment, utility and materials purchases to make sure they are not leaving savings on the table or creating avoidable compliance risk.” 5/21/2026