Impact of Ohio Senate Bill 200 on Sales and Use Tax Refunds

The State of Ohio recently adopted into law Senate Bill 200 ("SB 200") which makes Ohio's tax law more "taxpayer friendly" and, in part, increases efficiency in the sales and use tax refund process. Effective September 6, 2002, SB 200 allows consumers to apply directly to the Ohio Department of Taxation (the "Department") for sales and use tax refunds, thus eliminating the step of going through a vendor to obtain a refund. A consumer can obtain a sales and use tax refund directly from the Department where: (1) the consumer paid the tax directly to the state, and not through a vendor; (2) the consumer paid the tax to a vendor, but the tax was not refunded to the vendor and the vendor has not refunded the tax to the consumer; or (3) the consumer paid the tax to a vendor, but received a refund of the purchase price (but not the tax) from the manufacturer or other party. Consumers can file a request for refund retroactively up to four years from filing the applicable return.

In addition, SB 200 expands the authority of the Department to issue direct payment permits to consumers, which allow consumers to pay sales tax directly to the state versus the vendor or seller collecting the tax. SB 200 provides that the Department may adopt criteria for the issuance of direct pay permits to consumers to improve compliance and efficiency in administering the tax.

This section of SB 200 is codified in Ohio Revised Code 5739.07, 5741.10, and 5739.031(A).

If you have any questions regarding the above information, please contact Mr. G. Brint Ryan, Managing Principal of Ryan & Company, at 972.934.0022. Mr. Ryan can also be reached via e-mail.