sales and use tax

Tax amnesty programs can be a great option for businesses with outstanding tax liabilities.

Ohio is providing a tax amnesty program Jan. 1 through Feb. 15, 2018. For qualifying taxpayers who apply for amnesty and pay eligible outstanding taxes, the state will waive penalties and a portion of the interest owed. Ohio Tax Commissioner Joe Testa says, “If we all comply with the tax laws, as most Ohio taxpayers do already, we can lower the tax rates for all taxpayers.”

States typically offer tax amnesty to increase tax collections. A 2001–2002 audit raised $48.5 million for Ohio, and a 2006 program generated $60 million. The state predicts the 2018 amnesty program will generate “perhaps tens of millions, but likely less than the revenue amounts yielded by the prior amnesties.” Most income should come from the commercial activity tax (CAT), personal income tax, and sales and use tax:

  • $8.7 million from CAT
  • $5.8 million from personal income tax
  • $5.5 million from sales and use tax

Promoting and administering the tax amnesty program will cost the state approximately $1.5 million.

Who’s eligible for amnesty?

The amnesty program is open to Ohio business and individual taxpayers with unreported or underreported taxes due and payable as of May 1, 2017, provided the Ohio Department of Taxation has not yet contacted them about these taxes. Unregistered taxpayers may apply for amnesty but must first complete and submit a taxpayer registration form.

To qualify for tax amnesty, taxpayers must remit full payment, along with applicable interest, when filing the application. The state will not grant amnesty to taxpayers who apply with partial payment of the tax owed.

Which taxes are eligible for amnesty?

Amnesty is available for many Ohio taxes, but not all. Eligible taxes include, but are not limited to:

  • Alcoholic beverage taxes
  • Cigarette or other tobacco products tax
  • Commercial activity tax
  • Individual income tax
  • Sales tax
  • Use tax

Resort area excise taxes are not eligible. In addition, the above taxes are not eligible if they’re under audit (or have already faced an audit), or if a bill or a notice of assessment or audit has been issued.

How to apply?

Applicants must complete a signed Ohio Tax Amnesty application along with the completed and singed tax return(s) and full payment in the total amount due. Applications and associated documents should be mailed to the Ohio Department of Taxation Tax Amnesty, P.O. Box 183050, Columbus, OH 43208-3050.

Taxpayers seeking amnesty for more than one type of tax will likely need to complete separate applications for each tax type. The Ohio Department of Taxation will post tax amnesty applications and instructions on its Resources page starting Jan. 1, 2018.

The department will notify applicants of the status of their application (i.e., approved or denied), within 30 days after receiving it.

Why apply for amnesty?

Amnesty programs are generally considered a win for both the state and taxpayers: The state obtains additional revenue without the expense or hassle of audits, and participating taxpayers reduce the penalties and interest owed to the state. The state rewards self-reporters by waiving half of all interest and 100 percent of the penalties owed on unpaid taxes.

Learn more about the upcoming tax amnesty program at the Ohio Department of Revenue.

Information about other state tax amnesty programs is available from the Avalara Resource Center.