Ohio Consumer Use Tax Amnesty Program

What is it?
The consumer's use tax amnesty provisions (of H.B. 153) provide an excellent opportunity for business taxpayers to satisfy their past consumer's use tax liability. The amnesty program begins October 1, 2011 and ends May 1, 2013.

Sales and Use Tax
With today's global economy, many purchases are made from out-of state suppliers, mail order companies or internet-based suppliers who may not be required to collect Ohio sales tax. State and local governments are all searching for ways to increase revenues. The Ohio Department of Taxation (ODT) has discovered through its sales tax audits (which also may include review of purchases made by the business) that many businesses have not paid sales tax on some purchases. When sales tax is not collected, the consumer is responsible to pay use tax if the goods or services are used, stored or otherwise consumed in Ohio. The use tax must be paid by the purchaser directly to the State of Ohio through a consumer's use tax return or in the case of individuals, on their individual Ohio income tax return. Based on the information above, if you have not paid taxes to the State of Ohio on goods or services, then the Amnesty Program is for you.

Details of the Amnesty Program
If you have qualified for the program then:

• no use tax, penalty or interest will be assessed for periods prior to January 1, 2009
• there is no criminal prosecution for participants
• consumer use tax due, for periods from January 1, 2009 through the last day of the month preceding the date amnesty is requested must be paid by the participant
• amnesty program participants will be required to pay the use tax on a regular basis on all future purchases

In addition, consumers not registered for use tax with ODT as of June 1, 2011 will have interest and penalty associated with use tax owed for periods after January 1, 2009 abated. For consumers who were registered as of June 1, 2011, the participant is responsible for interest and penalty (if any) on the delinquent consumer use tax paid under this amnesty program.

Payment of the tax is due as a single sum if the amount is less than $1,000. For amounts due over $1,000, the participant can apply for a no-interest payment plan.

Who is ineligible?
You do not qualify for the program if you or your business has received a notice of assessment from ODT for consumer's use tax prior to September 29, 2011. However, consideration of whether a taxpayer is barred from participating will be on a period by period basis.

What if I choose to ignore the amnesty program?
Consumers who do not participate in the amnesty program will be subject to audit by ODT, and ODT will be permitted to assess tax, interest and penalties for any consumer use tax due on or after January 1, 2008. Due to the complex rules and subsequent rulings regarding taxable sales or services in Ohio, sometimes the most difficult aspect of sales and use tax is determining which items and services are taxable.

If you have questions or concerns about the Ohio Consumer Use Tax Amnesty Program, please give Hall, Kistler a call at 330-453-7633.