Tax & Accounting Blog

Ohio to Start Enforcing Use Tax Obligations of Businesses

Indirect Tax, Sales and Use Tax February 1, 2011

Currently only a small percentage of Ohio’s 380,000 registered businesses have a use tax account. The State has noticed and is planning on contacting and investigating those businesses without such an account in the coming months. If the Department’s investigation shows that use tax is due and the company has not filed a use tax return the general four-year statute of limitations will not apply. Although the audit period is unlimited it is the Department’s general policy only to look back seven years. A company who is concerned regarding potential long term use tax liability may want to consider requesting a voluntary disclosure agreement which can limit their liability to the previous three years (tax and interest). It is possible to avoid paying penalties by going this route as well. A VDA is not an option once a business has been contacted.