Ohio recently enacted legislation creating two tax amnesty programs that may affect you or your business.
Use Tax Amnesty Program
The first program is a change to the Ohio Use Tax Education Program. In case you are unaware, here is a quick refresher on Ohio use tax.
Use tax is a tax on the storage, use or other consumption of tangible personal property and certain taxable services in Ohio. The use tax is a complement to the sales tax. In general, if you have paid Ohio sales tax on an item, then you do not owe Ohio use tax. If you have not paid Ohio sales tax on an item that is being used in Ohio then you will need to self-remit use tax.
For example, if a business located in Cleveland, Ohio purchases a desk for his or her business from a vendor located in Buffalo, NY no Ohio sales tax is paid at the time of purchase. Therefore, the business located in Cleveland would be required to self-remit Ohio use tax on the purchase since it is being used in the state of Ohio.
The Use Tax Amnesty Program now provides all consumers (individuals and businesses) that did not have a consumer use tax account with a waiver of all penalties and interest, provided that all use taxes outstanding on or after January 1, 2009 is paid in full.
The Tax Commissioner may not waive penalty and interest if the taxpayer did have a use tax account on or before June 1, 2011.
The new amnesty program also allows use tax payment plans for up to seven years.
The Use Tax Amnesty Program will last from October 1, 2011 to May 1, 2013. Official forms and instructions for this amnesty program will be issued in the near future. Look for updates in our monthly e-newsletter or at http://skodaminotti.com/blog.
Consumers who do not participate in this amnesty program may be subject to an audit for Ohio use tax due on and after January 1, 2008, plus applicable penalties and interest.
General Tax Amnesty Program
The second program is a general amnesty program which applies to delinquent taxpayers for most taxes (other than use tax) administered by the Ohio Department of Taxation. Delinquent taxpayers have the opportunity to resolve their tax liabilities by paying in full all tax liabilities (plus 50% of interest) as of May 1, 2011. The remaining 50% interest and all penalties will be waived.
The program runs only for a short time from May 1, 2012 to June 15, 2012.
Official forms and instructions for this amnesty program will be issued in the near future. Look for updates in our monthly e-newsletter or at http://skodaminotti.com/blog.
Questions Regarding Tax Amnesty Programs