Ohio Aims to Collect Use-Tax

Columbus, OH–If the Ohio Department of Taxation (ODT) has its way, all state residents who have purchased items from remote sellers (catalogs or e-commerce sites that don’t have a physical presence in the state) will pay use-taxes on such purchases. This year the ODT has included a line for use-tax on its 2000 tax return. As of March 8, more than 11,000 taxpayers had made use-tax payments totaling nearly $300,000. ODT estimates that collections will reach around $1.8 million once all returns are filed.

While catalogers and other remote sellers are protected from being forced to collect taxes on sales to states in which they have no nexus per the Supreme Court’s 1992 decision “Quill Corp. v. North Dakota,” Ohio has found a loophole in its 65-year-old use-tax law. While the state cannot force taxpayers to pay the tax, it can ask them to make a good-faith effort to report and pay the tax on purchases where no tax was paid. Sixteen other states, including Michigan, Kentucky, and Indiana, also have a use-tax line on their income tax return or include a use-tax form with the tax booklet.

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