September 26, 2011
Ohio Offering Businesses Tax Amnesty to Raise
Awareness of Little-known Use Tax
Use Tax Amnesty starts October 1st – features no penalty or
interest on tax owed.
The Ohio Department of Taxation (ODT) today began mailing the
first major batch of invitations to more than 200,000
businesses encouraging them to take advantage of the state’s
first use (pr. yoose) tax amnesty.
The amnesty will run from October 1, 2011 until May 1, 2013.
It’s an opportunity for Ohio businesses to solve a tax
problem they may not even know they have.
The use tax is a complement to the sales tax – same tax rate;
same tax base – but ODT auditors are finding an increasing
number of business taxpayers don’t fully understand the tax
or even know that they should be paying it.
Tax Commissioner Joe Testa says the goal of the amnesty is to
increase awareness of the use tax among business taxpayers
and educate them on how it works, “We do collect a
significant amount of use tax but much of it comes from
companies that have significant accounting and financial
resources. It’s the smaller companies without that kind of
tax expertise on hand that struggle with or overlook use tax.
With the amnesty, we’re trying to make it as easy as possible
for them to get a handle on the use tax.”
In general, only suppliers with a physical presence in Ohio
are obligated to collect sales tax. If a supplier is out of
state, or out of the country, they often do not have to
collect Ohio sales tax. That’s when the use tax comes into
play. If an Ohio company does not pay sales tax on a taxable
product or service, then by state law, they are obligated to
pay use tax.
The use tax has been law since 1936. It was enacted to
protect Ohio businesses whose customers were crossing state
lines to avoid paying the recently enacted state sales tax.
Testa says despite its long history, the use tax is a
relatively new issue for many businesses, “With the growth of
the Internet and mail-order commerce, more and more companies
are buying products and services from suppliers outside Ohio
who don’t collect sales tax. It can be complicated keeping
track of what’s taxable and what’s not. The amnesty is
designed to give taxpayers time to build greater
understanding of the tax and pay off any outstanding use tax
liability at the lowest possible cost.”
The use tax amnesty allows businesses that owe use tax to pay
back tax incurred since January, 2009 with no penalty or
interest. The program also provides the option of entering
into a payment plan, if the amount of tax owed exceeds
In exchange, businesses that sign up for amnesty must
register for a use tax account and going forward, comply with
all provisions of use tax law.
The Ohio Department of Taxation web site –
tax.ohio.gov -- provides extensive resources
to help business taxpayers learn about the use tax and sign
up for the amnesty program if appropriate.
Businesses can also get information and assistance by calling
ODT at 1-800-304-3211.
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(News media with further questions please contact Gary
Gudmundson, ODT Communications Director at (614)