Legal Resources - Tax Rules

Tax Rules: Final: 5703-9

5703-9-02 Maintenance of records.

(A) Since all sales of tangible personal property in this State are presumed to be subject to Sales Tax until the contrary is established, the burden of proof rests upon each vendor to show what part, if any, of their gross receipts from sales resulted from nontaxable sales.

Each vendor must maintain complete and accurate records which include both:

(1) Primary records such as purchase invoices, bills of lading, sales invoices, guest checks, exemption certificates, tax payment receipts, and cash register tapes;

(2) Secondary records such as bank deposit receipts and day books, journals, or any other records in which accumulated data is recorded.

Any record in which accumulated data is recorded by the vendor must be supported by complete detail records from which such data was accumulated.

Sales invoices and cash register tapes for taxable sales must have separately stated thereon the total price and the tax amount charged, which amounts are to be accumulated and recorded in a secondary record. Invoices for lodging must also clearly show the length of stay, in terms of consecutive days for each guest.

All records must be preserved for a period of four years unless the Commissioner consents, in writing, to their destruction within that period or by order requires that they be kept for a longer period.

The tax collected by a vendor, as trustee for the State of Ohio, is a collection for the benefit of the State and no person other than the State shall derive any benefit from such collection other than that provided for in Revised Code 5739.12.

(B) If any vendor fails to maintain complete primary sales records which may be utilized in verifying the accuracy of the figures reflected in their secondary records and/or reported on their tax returns, the Commissioner will use one of the following methods for such verifications:

(1) Determine taxable and nontaxable sales and the tax due on sales subject to the bracket tax levied in Revised Code 5739.02, as provided for in Revised Code 5739.13.

(2) Determine "net receipts" as the basis for application of the four percent tax levied in Revised Code 5739.10.

"Net receipts" means the total amount of the prices of all sales less (a) the sale price of property returned by the consumers when the full price of tax has been refunded either in cash or by credit, (b) sales under sixteen cents, (c) and sales of food for human consumption off the premises where sold.

The above described determinations will be based upon (i) purchase records, (ii) a sampling of the vendor's business activity for a representative period, and/or (iii) other information relating to the sales made by such vendor.

If any vendor fails to maintain complete secondary records reflecting the total amount of the prices of sales subject to tax and the tax due thereon which may be utilized in verifying the tax liability reported on their tax return, the Commissioner will verify the reported tax liability by use of a sample of the vendor's business activity for a representative period. If this verification method reveals an error in the reported tax liability, the rate of tax as determined by the Commissioner will be deemed to be the rate of tax collection by such vendor and will be applied to the receipts from taxable sales made during the entire period of time under review.

Effective: 9-1-67 as TX-11-02

Promulgated under: 5703.14

Prior effective dates: 4-27-65