CPA & Business Advisory Blog

Tax Updates: Amnesty Programs and InvestOhio

Posted on Tuesday, May 15th, 2012 by

All Ohio businesses should be aware of several tax programs that are currently underway that may be of benefit to you depending on your current tax situation.

General Tax Amnesty Program

As you may remember from a past column, for the first time in six years, the state of Ohio is making a general tax amnesty program available for a very limited window. The time to take advantage of that window is now.

The program began on May 1 and runs through June 15, so you will need to act quickly.

The amnesty program is available to people who owed back taxes as of May 1, 2011. A variety of taxes are eligible for the amnesty program, including:

  • Commercial activity tax
  • Corporate franchise tax
  • Employer withholding tax
  • Individual income tax
  • Sales and seller's use tax

The main reason to take advantage of the amnesty program is to reduce possible fees and interest payments that you may owe due to unpaid taxes. Delinquent taxpayers have the opportunity to resolve their tax liabilities by paying in full all tax liabilities (plus 50% of interest) as of May 1, 2011. The remaining 50% interest and all penalties will be waived. Additionally, anyone granted amnesty won’t face criminal or civic prosecution for the debt in the future.

Payment arrangements will not be possible for the amnesty program. To qualify for amnesty, full payment of the tax(es) and applicable interest must be made by June 15, 2012.

If the state has already issued a delinquency notice or bill, the taxes are not available for amnesty. Additionally, any taxes connected to an audit that is currently underway are also not eligible.

For more information on the general amnesty program, contact the Ohio Department of Commerce at 800-304-3211 or visit http://tax.ohio.gov/faqs/Amnesty/amnesty_general.stm.

Use Tax Amnesty Program

Another amnesty program is currently ongoing as well, the use tax amnesty program.

As a reminder, use tax is a tax on the storage, use or other consumption of tangible personal property and certain taxable services in Ohio. The use tax is a complement to the sales tax.   In general, if you have paid Ohio sales tax on an item, then you do not owe Ohio use tax.   If you have not paid Ohio sales tax on an item that is being used in Ohio then you will need to self-remit use tax.  

The Use Tax Amnesty Program now provides all consumers (individuals and businesses) that did not have a consumer use tax account with a waiver of all penalties and interest, provided that all use taxes outstanding on or after January 1, 2009 are paid in full.

This program is a great opportunity for businesses who have neglected to sign up for a use tax account to avoid significant penalties and interest.

The Use Tax Amnesty Program lasts until May 1, 2013.

To learn more about this program, we suggest you review our column in the September issue of Builders Exchange or visit http://tax.ohio.gov/divisions/sales_and_use/index_use.stm.

InvestOhio Update

You may have also recall hearing of the InvestOhio tax credit program which began last November. Through the program, individuals who invest up to $10 million in eligible small businesses may receive a 10 percent income tax credit if the investment is held for two years.

If you already applied for the InvestOhio credit, please be aware that starting the week of April 9th, the State of Ohio began sending emails to all InvestOhio applicants that had applied for the InvestOhio credit with an investment date that had passed. The email was to inform applicants that the substantiation procedures were available to substantiate any cash investments that had occurred to date. Applicants were informed to logon to his/her respective Ohio Business Gateway (OBG) account and complete the substantiation process.

Please note that this process must be done on the investor OBG account.  It cannot be completed at the company (enterprise) level. Each investor must complete their own substantiation.

If you receive a notice, please keep in mind that you have only 30 days to complete the substantiation process.

If you have not yet applied for the InvestOhio program, funds are still available. To learn more, we suggest you visit http://www.development.ohio.gov/InvestOhio/InvestOhio.htm.

For more information on Skoda Minotti’s Tax Planning & Preparation services please leave a comment below, or contact Amy Gibson at 440-449-6800.

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