Program gives businesses time to pay Ohio use tax

Associated Press

COLUMBUS

Businesses that haven’t been paying Ohio’s “use tax” will have more than a year to comply and avoid punishment under an amnesty program in the new budget.

The use tax has been on the books for 75 years, but has long been ignored by many in Ohio, The Columbus Dispatch reported. Businesses and individuals are required to pay the tax on goods bought outside the state that did not carry a sales tax, but the state Department of Taxation is targeting businesses first as it seeks its share of money from the explosion of business over the Internet.

The use tax is intended as a complement to Ohio’s sales tax. Businesses that buy items out of state without having to pay Ohio’s sales tax are required to pay the use tax instead. No use tax is owed in Ohio if the company pays out-of-state sales tax on an item it buys and the two rates are the same.

The amnesty program included in the state budget that went into effect last month will begin Oct. 1 and continue until May 2013.

Businesses that voluntarily enter into the program will be required to pay use taxes going back to Jan. 1, 2009. Taxes that would have been due before that will be forgiven. There also won’t be any penalties or interest, and Ohio can set up payment plans if the tax liability is more than $1,000.