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Understanding the Ohio Consumer’s Use Tax Amnesty Program

May 14, 2012

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In addition to the general tax amnesty program currently offered by the Ohio Department of Taxation, the department is also conducting a consumer’s use tax amnesty program. This amnesty program began on October 1, 2011 and goes through May 1, 2013. This program is an excellent opportunity to come forth and get current with your unpaid use tax liability.

What is Consumer’s Use Tax?

Use tax is a complementary tax to the sales tax. In general, use tax is owed by a purchaser on a transaction when no sales tax was charged on a taxable transaction. The tax that is due must then be paid directly by the purchaser to the State of Ohio through a consumer’s use tax return on the Ohio Business Gateway. The most common situation that gives rise to a use tax liability is when an Ohio customer makes a mail order or internet purchase from an out-of-state seller and no sales tax is charged.

Under Ohio law, all tangible personal property used in Ohio and certain specified services are subject to use tax unless Ohio sales tax has been paid or there is an exception or exemption that applies to the transaction. The following are some examples of tangible personal property subject to use tax if sales tax has not been paid to the vendor:

•    computers
•    monitors
•    printers
•    scanners
•    fax machines
•    office supplies
•    furniture
•    cleaning supplies

In addition, the following are some examples of services subject to the use tax if sales tax has not been paid:

•    installation and repair of taxable tangible personal property
•    temporary employment
•    landscaping
•    exterminating
•    automatic data processing
•    janitorial
•    storage
•    maintenance contracts
•    employment placement

The Advantages of Amnesty

Under the use tax amnesty program, all use tax liability incurred prior to January 1, 2009 will be waived. Additionally, consumer’s use tax paid under amnesty is not subject to interest or penalties. Note however that businesses that have previously received a consumer’s use tax assessment are not eligible for amnesty.

Other Amnesty Programs

In addition to Ohio, Texas and Kentucky also have amnesty programs scheduled for 2012.

The Texas amnesty program begins June 12, 2012 and concludes August 17, 2012. The Texas amnesty applies to all state and local taxes and fees administered by the Comptroller’s office, including sales and use taxes, franchise taxes, and inheritance taxes. The program does not apply to the Public Utility Commission gross receipts tax. Taxpayers will not be subject to any interest or penalties on the actual tax paid. Returns originally due before April 1, 2012 are eligible for this limited amnesty.

Kentucky will offer a tax amnesty program during their fiscal year ending June 30, 2013. The specific dates have not yet been announced, but it will be for a period of 60 to 120 days. The amnesty will apply to all taxes incurred between January 1, 2001 and October 1, 2011. The amnesty applies to most taxes, except property taxes, and Kentucky will waive all penalties and 50% of the interest due on the returns submitted.

Please reach out to one of our locations, to be connected to a SALT expert, if you are interested in participating in any of the above amnesty programs.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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