For the past several months, we’ve told you about Ohio’s use tax amnesty program. You may have read that the program will continue through April 1, 2013. So why should you participate in the amnesty program now rather than later? Here are four reasons.
Threat of a use tax audit.
The Ohio Department of Taxation will continue to conduct use tax audits, targeting the more than 300,000 identified businesses that don’t have use tax accounts. Being face-to-face with an auditor in your office will disrupt your business — and could lead to the discovery of other tax liability. As a result, you could be spending more time with your tax professional than you expected or budgeted for.
When you pay use tax liability, you pay money out of your own company’s finances – often when you could have been passing this expense on to your customers. If you get into compliance now, you can determine how your use tax liability fits into your bottom line – and adjust your prices accordingly.
The Ohio legislature set the amnesty program to run through April 1, 2013, but any program that costs the State of Ohio money is subject to change, thanks to a precarious economy and detailed budgeting process.
You’ll probably know about any law change before it occurs, but most projects take several months to complete. So it’s possible the program could end before you have a chance to participate, even if you have advanced notice.
Peace of mind.
No one likes to lie awake at night worrying about an unknown exposure amount. By participating in Ohio’s use tax amnesty program, you can bring your use tax liability up-to-date and avoid a longer look-back period, which would mean greater liability. You’ll also avoid penalties and interest that you would have owed otherwise.
If you think that you may have use tax liability, discuss it with your tax professional. He or she can help you apply for Ohio’s use tax amnesty program as well as prepare the data you will need to participate in the program.