Tax & Accounting Blog

Ohio Clarifies Sales Tax Liability on Rate Changes

Indirect Tax, VAT Tax Rates December 3, 2010

The Ohio Department of Taxation has adopted a regulation effective 29 November 2010, Ohio Admin Code 5703-9-55, which clarifies rules for state sales and use tax collection for new rate changes. This regulation states that when the effective date of a rate change pertaining to the state sales and use tax rate is fewer than 30 days after the passage of new legislation, a vendor or seller who has erroneously collected tax at the old rate is not liable for failure to collect tax at the new rate. The failure to collect tax at the new rate does not extend beyond 30 days and this relief is not available to a vendor or seller who fraudulently fails to collect tax at the new rate or who solicits purchasers based on the outdated sales tax rate. Something to note for all you Ohio taxpayers.