Ohio has passed legislation (HB 153) that Governor Kasich signed Friday July 1^st.    The legislation includes some tax provisions that may be of immediate interest to you company.  Here is a brief overview:

Specifically, Ohio has enacted extremely favorable legislation regarding use tax.  First, it appears that the Commissioner cannot issue assessment of use tax that should have been paid prior to January 1, 2008 (ORC 5703.58).  This effectively limits the statute of limitations to approx. 42 months – compared to 7 years* or more for some taxpayers.  Assessments issued prior to enactment unfortunately do not qualify for this limited look back.  Taxpayers undergoing a current audit need to evaluate this provision immediately – and be sure they are protected by this reduced statute of limitations.

Second, there will be a Use Tax Amnesty Program where certain taxpayers will be eligible for abatement of all tax, penalty and interest for periods prior to January 1, 2009, and all penalty and interest for following periods.  Payment plans of up to 7 years may also be available.  This is an unprecedented opportunity for Ohio businesses - an effective look back period of 30 months for qualified taxpayers!

In addition, there will be an amnesty for most Ohio taxes.  Details will be forthcoming.

Businesses should not take this opportunity lightly.   As an example, we are working with a chemical refinery with a proposed assessment of $600,000.00 in use tax – an assessment that will be cut by at least 50 % under new law.  In addition, we are also currently working with clients undergoing current audits in automotive and other industries that are likely to see tens of thousands of dollars in reduced assessments.

We will be analyzing this bill over the next several weeks to iron out the details.  Please contact us in the meantime with questions.

*In practice, the Ohio Department of Taxation has been looking back 7 years if the taxpayer has not filed use tax returns.