News and Insights

Ohio Introduces Use Tax Compliance Outreach

Tax Development Feb 18, 2011

The Ohio Department of Taxation (“Department”) recently introduced a use tax compliance outreach program through which the Department will help businesses understand when they owe use tax. The program, entitled Use Tax Education Program (UTEP), also provides for a limited use tax amnesty program, which includes a four-year look-back period and penalty waiver for participating businesses.

Initially, the Department will use available information to pinpoint businesses that owe use tax and are not currently registered to pay the tax. The Department will then contact and instruct the identified businesses to register and pay use tax on future untaxed purchases used in Ohio.

A contacted business may also enter into a UTEP agreement to pay any use tax and interest due on past untaxed purchases. Under a UTEP agreement, the Department waives the 15% penalty on unpaid use tax and limits use tax look-back to four years. Without an agreement, the Department’s policy is to audit the previous seven years and, by law, may go back ten years to assess use tax.

A business that has not been contacted by the Department may limit its Ohio use tax liability even further by requesting a voluntary disclosure agreement with the Department. The Ohio voluntary disclosure program generally provides for a three-year look-back period.


Leslie S. Hahn