Amendment A change, modification, or revision to a tax form.
Amnesty The tax department's decision to waive interest or penalties on past due returns to be filed and paid within an outlined time period.
Appeal To request a review of a decision or adjustment made by the tax department.
Audit A review or examination of a business' or individual's accounts.
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Building means a permanent fabrication or construction, attached or affixed to land, consisting of foundations, walls, columns, girders, beams, floors, and a roof, or some combination of these elemental parts, that is intended as a habitation or shelter for people or animals or a shelter for tangible personal property, and that has structural integrity independent of the tangible personal property, if any, it is designed to shelter. “Building” includes a manufactured or mobile home building as defined in division (B)(2) of this section by law.
Business includes any activity engaged in by any person with the object of gain, benefit, or advantage, either direct or indirect. “Business” does not include the activity of a person in managing and investing the person’s own funds.
Business income means income, including gain or loss, arising from transactions, activities, and sources in the regular course of a trade or business and includes income, gain, or loss from real property, tangible property, and intangible property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation.
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Casual sale means a sale of an item of tangible personal property that was obtained by the person making the sale, through purchase or otherwise, for the person’s own use and was previously subject to any state’s taxing jurisdiction on its sale or use, and includes such items acquired for the seller’s use that are sold by an auctioneer employed directly by the person for such purpose, provided the location of such sales is not the auctioneer’s permanent place of business. As used in this division, “permanent place of business” includes any location where such auctioneer has conducted more than two auctions during the year.
Compensation means any form of remuneration paid to an employee for personal services.
Computer services means providing services consisting of specifying computer hardware configurations and evaluating technical processing characteristics, computer programming, and training of computer programmers and operators, provided in conjunction with and to support the sale, lease, or operation of taxable computer equipment or systems.
Consumer means any person who has purchased tangible personal property or has been provided a service for storage, use, or other consumption or benefit in this state. Consumer does not include a person who receives, without charge, tangible personal property or a service.
Deduction the amount subtracted from adjusted gross income when calculating taxable income.
Dependents means dependents as defined on the Internal Revenue Code and as claimed in the taxpayer’s federal income tax return for the taxable year or which the taxpayer would have been permitted to claim had the taxpayer filed a federal income tax return.
Domicile means a principal residence that the taxpayer intends to use for an indefinite time and to which he or she intends to return after an absence. A taxpayer has only one domicile even though he may have more than one residence.
Engaging in business means commencing, conducting, or continuing in business, and liquidating a business when the liquidator thereof holds itself out to the public as conducting such business. Making a casual sale is not engaging in business.
Exemptions (personal income) are amounts that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions- personal and dependency. Each exemption reduces the income subject to tax. While each is worth the same amount, different rules apply to each.
Exemption (sales tax) means that although the transfer of property or the purchase is defined as a sale, no tax is due because the item is going to be used by the purchaser in an exempt way or the sale was made to a person that is exempt from paying sales tax.
Exempt Sales- Sale for which sales tax does not need to be remitted or collected.
Federal Adjusted Gross Income includes, but is not limited to, wages, salaries, commissions, interest, dividends, business income, capital gains/losses, pensions, rents and miscellaneous income.
Fiduciary means a guardian, trustee, executor, administrator, receiver, conservator, or any other person acting in any fiduciary capacity for any individual, trust, or estate.
The Finder provides information on local taxing jurisdictions and tax rates for all addresses in the State of Ohio. At the present time, municipal tax, Ohio school district income tax and the sales and use tax features of The Finder are operational.
Fiscal year means an accounting period of 12 months ending on the last day of any month other than December.
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Gross Income the sum of money, goods, services, and property a person receives that must be reported on a tax return.
Gross Receipts the figure used for purposes of the commercial activity tax and the resort area gross receipts tax. Gross receipts refers to the total amount realized- without deduction for the cost of goods sold or other expenses incurred- from activities that contribute to the production of gross income. The public utility excise tax is also measured by gross receipts for business done from operations as a public utility.
Gross Sales the sum of all sales made during the reporting period. Gross sales include both taxable and non-taxable sales.
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Head of Household a federal filing status option. Indicated requirements for filing this status are: 1. Unmarried or considered unmarried on the last day of the year. 2. Paid more than half the cost of keeping up the home for the year. 3. Had a qualifying person live in one’s home for more than half the year (except in temporary absences such as school). However, a dependent parent does not have to live with the taxpayer.
Home of Record
typically the state one lives in when joining the military.
I-File a fast, free, and secure way to file taxes through the Ohio Department of Taxation’s website. I-File wizard asks taxpayers a series of questions, and then compiles a state or school district income tax return based on those answers.
Income Tax a tax on income, both earned and unearned. Income taxes may apply to both individual’s personal income as well as the income earned by businesses.
IRS The Internal Revenue Service is the revenue service of the federal government. This agency is a bureau of the Department of the Treasury, and is under the direction of the Commissioner of Internal Revenue. The IRS is responsible for collecting taxes and interpreting and enforcing the Internal Revenue Code.
IT-4 the Employee’s Withholding Exemption Certificate. This determines the amount of money that will be withheld from one’s paycheck for state taxes. The more exemptions one claims, the less tax will be withheld from his or her paycheck.
form used by individuals and military service members and spouses who claim no Ohio income tax liability and are not required to file an Ohio return.
Joint Filing Credit a credit offered to a married couple filing a joint Ohio income tax return. To qualify each spouse must have contributed to at least $500 of the Ohio taxable income.
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K-1 form the statement prepared by a legal entity and distributed to owners and shareholders of that entity which outlines their portion of the income, losses, and deductions. An owner of a partnership, LLC, S-Corp, or other entity that passes through taxes to its owners, in most cases will receive a K1 form each year.
Lease or Rental means any transfer of the possession or control of tangible personal property for a fixed or indefinite term, for consideration.
Liability the amount of a specific tax that a taxpayer owes; this amount can be reduced by credits.
Lien a claim on a piece of property. For example, when a financial institution loans money for purchase of a home, that mortgage loan is a lien. Taxing authorities can establish or place a lien on the property of a delinquent taxpayer. If the mortgage or loan or tax owed is not paid, the property can be sold to satisfy the lien.
Making retail sales the effecting of transactions wherein one party is obligated to pay the price and the other party is obligated to provide a service or to transfer title to or possession of the item sold. “Making retail sales” does not include the preliminary acts of promoting or soliciting the retail sales, other than the distribution of printed matter which displays or describes and prices the item offered for sale, nor does it include delivery of a predetermined quantity of tangible personal property or transportation of property or personnel to or from a place where a service is performed, regardless of whether the vendor is a delivery vendor.
Married Filing Jointly the filing status chosen by a married couple filing their taxes jointly with one tax return.
Married Filing Separately the filing status chosen by a married couple filing their personal income taxes separately on a return for each spouse.
Nexus (with this state) the seller engages in continuous and widespread solicitation of purchases from residents of this state or otherwise purposefully directs its business activities at residents of this state.
Nonbusiness income means all income other than business income and may include, but is not limited to, compensation, rents and royalties from real or tangible personal property, capital gains, interest, dividends and distributions, patent or copyright royalties, or lottery winnings, prizes, and awards.
Offset A personal income tax refund may be offset, or claimed by the Attorney General’s Office, to be paid toward the balance of an outstanding debt in collection.
Ohio Business Gateway (OBG) Ohio's one-stop online shop for business tax filing is designed to streamline the relationship between commerce and government. It provides tools that make it easier for any business owner to file and pay sales tax, commercial activity tax, employer withholding, unemployment compensation contributions, workers' compensation premiums and municipal income taxes for nearly 500 cities and villages.
Ohio Revised Code The acts filed with the Secretary of State's office are the actual statutory law of Ohio. The Ohio Revised Code, whether in book for or online is a reference to these laws.
Person includes individuals, firms, companies, business trusts, estates, trusts, partnerships, limited liability companies, associations, corporations, and any other business entities.
Payment Voucher If you owe taxes, a paper check or money order will need to be sent with a payment voucher (form IT-40P for State Income tax, SD 40P for School District Income Tax, ST 40P for Sales Tax)
Personal property includes every tangible thing that is the subject of ownership
Place of business means any location at which a person engages in business.
Premises includes any real property or portion thereof upon which any person engages in selling tangible personal property at retail or making retail sales and also includes any real property or portion thereof designated for, or devoted to, use in conjunction with the business engaged in by such person.
Price- means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money.
Quarterly Filing a schedule in which a business is designated to file tax returns every three months.
Receipts the total amount of the prices of the sales of vendors, provided that cash discounts allowed and taken on sales at the time they are consummated are not included, minus any amount deducted as a bad debt pursuant to section 5739.121 of the Revised Code. “Receipts” does not include the sale price of property returned or services rejected by consumers when the full sale price and tax are refunded either in cash or by credit.
Reciprocity an agreement between Ohio and its neighboring states that allows a resident of a state with whom Ohio has reciprocity to claim exemption from withholding of Ohio income tax. Ohio has reciprocity with all of its neighboring states (Indiana, Michigan, Kentucky, West Virginia and Pennsylvania).
Refund the amount of overpayment of business taxes or personal income taxes that may be returned to a taxpayer through the proper filing of a tax return or application for refund.
Refundable Tax Credit a credit against a specific tax that entitles a taxpayer to a refund, even in the absence of tax liability. This means that when a value of a credit fully eliminates tax liability, the state of Ohio is still obligated to issue a payment to the taxpayer for the value of the credit that remains after the liability has been extinguished.
Reportable Taxable Sales a figure calculated by subtracting the tax exempt from the gross sales.
Retailer Ohio law provides that a retailer is a consumer of the tangible personal property that it uses in its retail operation.
Retail sale (and Sales at Retail) all sales, except those in which the purpose of the consumer is to resell the thing transferred or benefit of the service provided, by a person engaging in business, in the form in which the same is, or is to be, received by the person
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Sale (and Selling) transactions for a consideration in any manner, whether absolutely or conditionally, whether for a price or rental, in money or by exchange, and by any means whatsoever.
Sales Tax a tax that is levied upon certain sales of products, merchandise, or services.
Seller the person from whom a purchase is made, and includes every person engaged in this state or elsewhere in the business of selling tangible personal property or providing a service for storage, use, or other consumption or benefit in this state.
Semi-annual Filing a schedule in which a business is designated to file returns every six months.
Single Filing Status a filing status that a taxpayer may claim, if on the last day of the year, he or she is unmarried or legally separated from his or her your spouse under a divorce or separation decree and he or she does not qualify for another filing status.
Situs the place where property is physically located, or where a taxable transaction occurs.
Sourcing in sales taxation, this term refers to the physical location where a sale occurs or where a sale is designated as having occurred. “Origin sourcing” refers to sourcing sales at the physical location of the retailer. When sales are sourced based on where the customer takes possession of a product or service -- such as through a delivery - this is referred to as “destination sourcing.”
Tangible personal property means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses.
Telecommunications service means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points.
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Unemployment Compensation income distributed from the state to a taxpayer for reasons of qualified unemployed status. Although these wages are not considered earned income, they are still considered taxable income for the purposes of the Ohio personal income tax. Businesses need to start a withholding account with the Ohio Department of Job and Family Services for unemployment compensation.
Use Tax a tax upon purchases where no original sales tax has been collected. The use tax rate is equal to the sales tax rate in one’s county. Every state with a sales tax also has a companion use tax.
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Vertical Equity the concept that people in different income groups should pay different rates of taxes or different percentages of their income as taxes.
Voluntary Compliance a system of tax compliance that relies on citizens to report their income freely and voluntarily, calculate their tax liability correctly, and file a tax return on time.
a payment towards use tax owed that can be made on a voluntary payment voucher, or included on the personal income tax return.
W-4 the Employee’s Withholding Allowance Certificate. It determines the amount of taxes withheld from the employee’s paycheck for federal taxes.
Wages compensation received by employees for services performed. Usually wages are computed by multiplying an hourly pay rate by the number of hours worked. A salary based wage may indicate that a set wage rate be paid to an employee for a designated time period, regardless of hours worked within that time period; for example, weekly, bi-weekly, monthly.
Withholding money that employers withhold from employees’ paychecks. This money is then deposited for the government and credited against the employees’ tax liability when they file their returns. Employers withhold money for federal income taxes, Social Security taxes, and some state and local income taxes.
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