Could Ohio Use Tax Amnesty expose vendors who aren’t charging sales tax?

Joe Popp | April 27th, 2012

Over the last year, you’ve heard a lot about Ohio’s Use Tax Education program, which has since become the Use Tax Amnesty program.  Use tax is tax that is owed on goods and purchases for which sales tax should have been charged, but wasn’t.  It’s a great program, assisting Ohio taxpayers in getting current with their Ohio use tax liabilities and waiving penalties and interest.  Ohio’s got another tax amnesty program, General Tax Amnesty (which includes sales tax) starting this week – which makes this a good time to mention a darker side to the Use Tax Amnesty program and how it could impact vendors.

Every taxpayer who submits a Use Tax Amnesty application must include a list of purchases with details on the dates of purchases and the vendors who sold the taxpayer the items without imposing Ohio sales tax.  Many times this is perfectly proper – some out of state and internet vendors don’t have to charge Ohio sales tax and some buyers mistakenly buy more items under a valid exemption certificate than they are entitled to. 

Through Use Tax Amnesty applications, Ohio is being given an electronic list of thousands of vendors who have not charged sales tax.  This list could be a great discovery and audit tool for Ohio to find vendors who are not properly charging Ohio sales tax on their sales.  So if you are providing a taxable service or product to Ohio taxpayers and not charging tax, watch out!  Have your clients reported your business on their Use Tax Amnesty filings?

If they have, or if you know about some period of time where you might have made some sales tax mistakes, there are ways to correct it in a tax advantaged way.  The General Amnesty Program, that runs from May 1 – June 15, 2012, is a great way to deal with specific incidents over a shorter period of time.  Have a longer period of sales tax issues to fix?  A voluntary disclosure may be a better program for you; and, unlike the general tax amnesty program, it has no formal end date. 

Need more information on amnesty?  Check out our other tax blog posts or visit the Ohio Department of Taxation’s website to learn more about the two amnesty programs and the voluntary disclosure program for sales tax.    

Contact our Ohio Tax Amnesty Specialists

Worried that your business might find itself in hot water over not charging the right sales tax?  Concerned that the Use Tax Amnesty program might have brought your business to the state’s attention?  Contact Rea & Associates (before the June 15th deadline!) for help.  Our Ohio tax experts will review your situation and determine if amnesty or voluntary disclosure is right for you.

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