Ohio Use Tax Webinar
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Small Business Strategies To Increase Your Cash Flow How to Become Compliant With Ohio’s Use Tax
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Changes in Ohio Use Tax laws will impact 300,000 Ohio businesses. Ohio Use Tax expert Justin Mohler, CPA addressed the Ohio Unse Tax Amnesty Program during his presentation. The recorded webinar is like at www.ohiousetax.com, where you can also receive a free use tax assessment.
Transcript of Ohio Use Tax Webinar
Small Business Strategies To Increase Your Cash Flow
How to Become Compliant With Ohio’s Use Tax
Use Tax History
• Use tax law established in 1936 • Applies to storage, use or other consumption of��� goods and services
• Use tax rate same as sales tax rate
www.ohiousetax.com
Ohio Use Tax Compliance
• 300,000 small to medium size businesses likely��� owe Ohio use tax money
• 18,000 voluntarily comply with the use tax law
Source: Ohio Department of Taxation
www.ohiousetax.com
Use Tax Examples & Exceptions
• Out of state purchases (e.g. vehicles, supplies, etc.) • Not taxed or improperly taxed from in-state or ��� out-of-state purchase (e.g. repair/maintenance��� services, different county rates, etc.)
• Over 100 exceptions to use tax law
www.ohiousetax.com
Why comply now?
• Ohio’s recent budget $8.0 billion deficit • Use tax will be enforced on small and medium ��� size businesses (UTEP)
• The Ohio Department of Taxation compiled a list ��� of companies
• Businesses not in compliance will receive letters beginning in August 2011
www.ohiousetax.com
Use Tax Barriers to Overcome
www.ohiousetax.com
Companies unaware of use tax
Difficult to apply ���use tax law
Use Tax Education Program (UTEP)
96% of purchase audits show taxes due
Do Nothing About Use Tax
• Will likely receive an assessment from Ohio��� Department of Taxation
• Collection efforts will be outsourced to non-tax firms ��� through the Ohio Attorney General’s Office
• Records needed – invoices, receipts,��� cancelled checks, etc.
• Will be subject to penalties and interest
• Shareholders, officers, key employees, have personal��� liability for the use tax
www.ohiousetax.com
Should I Do Nothing?
www.ohiousetax.com
Research purchase history
Determine potential exposure
Establish procedures
immediately
Proactive Approach - Use Tax Amnesty
• Program dates: October 1st 2011 – May 1st 2013
• Potential benefits
- Limit look back period to January 1, 2009
- Abatement of penalties
- Abatement of interest - Payment Plan Option
www.ohiousetax.com
Taxpayers Previously Registered
• Consumers registered as of June 1, 2011 - No tax, penalty or interest will be assessed for periods prior to January 1, 2009
- Participant is responsible for interest and penalty on the delinquent use tax
- No criminal prosecution for those who participate
www.ohiousetax.com
Taxpayers NOT Previously Registered
• Consumers NOT registered as of June 1, 2011 - No tax, penalty or interest will be assessed for periods prior to January 1, 2009
- Penalty and interest will be fully abated
- No criminal prosecution for those who participate
• Consumers that do NOT participate in the Use Tax Amnesty Program will be subject to audit by ODT
www.ohiousetax.com
Other Budget Bill Provisions
• Limitation on consumer use tax assessments (may impact current audits)
• General Tax Amnesty
- May 1, 2012 to June 15, 2012
- Other taxes (sales, CAT, income, etc.)
- Abatement of penalty and ½ of the interest
www.ohiousetax.com
Recommendations
• Research all in-state and out-of-state transactions to��� determine tax liability
• Work with a use tax expert to self-report findings and minimize exposure
• Limit look back period to January 1, 2009
• Avoid all interest, penalties and make payments • Determine if refunds are available to offset use tax��� liability (four year refund period)
www.ohiousetax.com
Ohio Use Tax Open Forum for Your Questions
Contact Information Justin P. Mohler, CPA
Watson & Associates, Inc. 3749 County Road 55
Bellefontaine, OH 43311
Office: 937.592.6926 Fax: 937.592.5195
Mobile: 614.361.8458
[email protected] www.watson-tax.com www.ohiousetax.com
www.ohiousetax.com
Thank You for Attending!
Contact Information Justin P. Mohler, CPA
Watson & Associates, Inc. 3749 County Road 55
Bellefontaine, OH 43311
Office: 937.592.6926 Fax: 937.592.5195
Mobile: 614.361.8458
[email protected] www.watson-tax.com www.ohiousetax.com
www.ohiousetax.com
