Amazon to Charge Sales Tax on Ohio Purchases – August 12, 2015 by Karen Raghanti

Ohio use tax, which is owed when taxable goods or services are used/performed yet no sales tax is collected, is making news. As a part of Amazon’s expansion into Ohio, as of June 1, 2015, the online distribution giant will begin collecting and remitting Ohio sales tax on their online orders. This means Ohio taxpayers will no longer need to self-assess and remit use tax associated with an Amazon purchase.

This is great news for the state, as it is extremely difficult to track online purchases and ensure taxpayers are remitting use tax when businesses do not have nexus, so are not required, to charge sales tax. States obviously prefer that businesses collect and remit sales tax at the time of purchase.

But the issue of sales/use tax in general remains an overall concern for taxpayers. In addition to internet sales, other key areas often overlooked for sales tax include certain taxable services, such as those related to electronic information, temporary labor and janitorial services. And the Ohio Department of Taxation continues to focus on enforcing use tax compliance, e.g., more use tax audits. One method is to identify taxpayers who are registered with Ohio for a CAT or sales tax account but do not have a use tax account. This is a red flag for Ohio to question why that business does not also have an Ohio use tax account.

The bottom line is that it is the business’s responsibility to self-assess and pay use tax if sales tax should have been paid and was not charged. Taxpayers should have a use tax account even if they will file “zero returns”; the account allows taxpayers to begin filing and confirm whether they have anything to report.

If you do not have an Ohio use tax account, please contact Karen Raghanti at kraghanti@cohencpa.com or a member of your service team to determine your exposure and the best course of action to become compliant.

More information can be found regarding Ohio use tax at the Ohio department of tax’s website. http://www.tax.ohio.gov/sales_and_use.aspx


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