Quick reminder that InvestOhio is still available for the state’s current fiscal year ending 6/30/2015. All applications must be submitted by 6/30/2015 to take advantage of InvestOhio. It is important to keep in mind the order items must take place to secure the credit. First, funds must be invested; once the funds are invested the entity has six months to make the necessary purchases. The investment must be maintained for two years to secure the credit.
In a recent decision by Florida District Court of Appeals, it was decided that Florida’s taxation of out-of-state sales violated commerce clause. The case at question was American Business USA Corp v. Florida Department, which involved the taxation of flower sales that were destined for delivery outside of Florida. American Business USA Corp (“American”) would sell flowers only via the internet and would utilize local florist to handle the order. American was charging sales tax only on the orders being delivered to customers located in Florida and any orders destined for delivery outside of Florida were not taxed. Florida statute requires the taxation of flower sales no matter where the arrangement is being delivered. Meaning if a florist in Florida takes an order for delivery of an arrangement to Georgia, Florida sales tax must be charged. The Florida Department of Revenue attempted to tax the sales that American made for delivery outside the State of Florida. Upon appeal to the District Court of Appeals it was determined that Florida had no basis for taxing these out of state sales. The impact to Florist throughout the State of Florida will be interesting.
Quick Service Restaurant Program (“QSR”)
Ohio has conducted a series of meetings to address the issue with a QSR, in particular the collection of sales tax on dine in meals. To Go Meals in Ohio are exempt from Ohio sales tax. The compliance program is an educational program being offered by the State of Ohio for the restaurant industry. The program offers different alternatives to the normal test check utilized by the State of Ohio for the determining the percentage of taxable food to be utilized during an Ohio sales tax audit. The following link will take you directly to the QSR report on the State of Ohio’s website http://www.tax.ohio.gov/Portals/0/communications/QSR%20REPORT%20FINAL.pdf . Within this report are the required forms for participation in the program.
The new compliance program reduces a QSR’s likelihood of being selected for audit and will permit the waiver of the 15% penalty normally assessed as part of a sales tax audit.
Participation in the program requires the following:
- Completion by managers and cashiers of an educational webinar
- The point of sale system (POS) must be programmed to a taxable setting as a default (other than drive through registers)
- QSR must be registered for all applicable Ohio taxes
- Returns must be timely filed
- No outstanding assessments
Ohio Municipal Income Tax Reform
Ohio’s municipal income tax reform has passed both branches of congress and is awaiting the Governor signature. Once the bill is signed by the Governor, Skoda Minotti will issue more detailed information concerning the changes enacted for municipal tax reform.
Some of the changes that are part of municipal reform are the following:
- NOL carry forward five years – all cities would have an NOL carry forward. Would be phased in over six years
- Creates uniform treatment of filing requirements – extensions, penalties, due dates, etc.
- Creates consistent taxation of pass-through entities – at entity level. Owners will be taxed by resident city.
- Adjustments to occasional entry rule – change from 12 days to 20 days.
- Changes the definition of a “day” for occasional entry purposes to where the employee spends a “preponderance of work day”.
Ohio Withholding and School District Withholding
The following withholding and school district changes are effective 1/1/2015:
- All withholding and school district withholding must now be made electronically through the Ohio Business Gateway.
- If an employer would like to be excused from the requirement of making these payments electronically, a request must be filed with the tax commissioner. The form that must be filed is WT OOR.