Ohio Tax Amnesty

Ohio Tax AmnestyMarina KingCompliance Program AdministratorNovember 15, 20171

Overview What Is Amnesty & How Does It Work What is Required When Applying How Will Taxpayers Be Notified Reasons Why The Application Will Be Denied Where Can I Obtain More Information About Amnesty2

What Is Amnesty & How Does It Work Amnesty is a limited time opportunity that allows taxpayers tocome forward and pay certain delinquent tax obligations The program runs from January 1 – February 15, 2018, forcertain taxes that were due and payable as of May 1, 2017,and still remain underreported or unreported ODT is authorized to forgive 100% of the penalty, and half ofthe interest3

Eligible Tax Types for Ohio Amnesty Individual Income TaxIndividual School District Income TaxEmployer Withholding TaxEmployer Withholding School District TaxPass-Through Entity TaxSales TaxUse TaxCommercial Activity TaxFinancial Institutions TaxCigarettes and Other Tobacco Product TaxesAlcoholic Beverage Tax4

Qualification Chart for AmnestyQualifies for Amnesty Return and payment is dueas of May 1st 2017 and Tax type is covered underthe qualifying taxesDoes Not Qualify for Amnesty Return and payment were dueafter May 1st of 2017 Tax type is not covered underthe qualifying taxes Taxpayer has received a billfrom the Department Taxpayer has received anassessment from theDepartment Taxpayer is under audit5

Test Your KnowledgeQ: Can I clear all my back taxesowed for Individual Income Taxfrom 1995 under the Ohio TaxAmnesty Program?A: Yes.6

What Is Required To Apply for Amnesty Taxpayer must complete and sign the appropriateamnesty application Taxpayer will need to submit return(s)/worksheet Taxpayer will need to submit payment in full withapplicable interestNote: If you are a business and have never registered with the Department youwill need to submit a registration form as well.7

Payment Options for Amnesty Paper Check Money Order Cashier’s Check*Note: Electronic payments can not be accepted by the Department for thisAmnesty Program nor are credit card payments allowed per HB 49.8

Amnesty Application ProcessApplication, payment, and return(s) must be sent to thefollowing address:Ohio Department of TaxationTax Amnesty ProgramP.O. Box 183050Columbus, Ohio 43218-30509

How Will I Know If My ApplicationWas Accepted?Each taxpayer will be notified within 30 days viapostal mail if their application was approved ordenied.10

Sample Amnesty LetterFront of LetterBack of Letter11

Reasons Why My Amnesty Was Denied The application submitted was for taxes that do not qualify for amnesty The application submitted was for taxes that qualify for amnesty but were not dueand payable as of May 1, 2017 The Department has issued a billing or an assessment notice for the period(s) forwhich you applied for amnesty The Department of Taxation has already begun an audit of the taxes for which youhave applied for amnesty Failure to include application, full payment, and return(s) If application is postmarked after February 15, 2018* Note: If the application is denied for any reason, the payment submitted will be applied to the period(s) which havebeen denied for amnesty; and full interest and penalty will be applied accordingly.12

Test Your KnowledgeQ: My application was postmarkedas of February 14, 2018 but it waslost in the mail and does not arriveto the Department until March 20,2018. Am I still eligible forAmnesty?A: Yes, the Department will alwaysreference back to the postmarkdate.13

Ohio Tax Amnesty Home PageVisit http://ohiotaxamnesty.gov for moredetailed information14

Ohio Tax AmnestyApplications & Returns15

Ohio Tax Amnesty FAQs16

Ohio Tax Amnesty FAQs17

Ohio Tax AmnestySample Calculator18

Ohio Tax Amnesty SampleAmnesty Calculator19

Ohio Tax Amnesty SampleAmnesty Calculator20

Tools to Help Calculate Interest*Note: If you are a FIT taxpayer, consultthe FIT instructions to determine how to calculate the interest.21

Ohio Tax AmnestyTax Professional Resource Kit22

Ways to ContactOhio Department of Taxation Phone: 1-800-304-3211Email Us – Go to tax.ohio.gov - click “Contact Us”Marina King - Marina.King@tax.state.oh.usSign up for Tax Alerts at tax.ohio.gov23

Ways to ContactOhio Department of Taxation24

Municipal Net Profit TaxPresented By: Jennifer McFarlandNovember 15, 2017

Agenda for Today’s Presentation Department of Taxation’s Role in the Municipal NetProfit Tax Administration Opt-in/Registration Process Estimated Payments Tax Return Additional Municipal Net Profit Tax Forms Questions

Department of Taxation’s Role in theMunicipal Net Profit Tax Administration H.B. 49 (the budget bill)– Option to file one municipal netprofit tax return through theOhio Business Gateway– ODT to handle all administrativefunctions Audit Collections Appeals– Distribution of Payments Prior to HB 49, businesses arerequired to file separate returnswith each municipality in whichthey did business

Opt-In/Registration ProcessWho is Eligible to Opt-in? Business taxpayers subjectto the municipal net profittaxIneligible Elections Sole proprietors anddisregarded entities are noteligible to opt-in with theDepartment

Opt-In/Registration ProcessWhen can I Opt-in? – Available Now! Taxpayers may opt-in now for taxable year 2018How can I Opt-in? Opt-in with the Department by completing a registration bythe 1st day of the 3rd month of your taxable year– Example – calendar year taxpayers must opt-in by March1, 2018 for taxable year 2018The administration of the tax for any period for which thetaxpayer has not opted-in with the Department will behandled by the applicable municipal corporations or thirdparty administrators.

Opt-In/Registration ProcessHow Long is an Election to Opt-in Binding? Election automatically renews until discontinued bythe taxpayer Taxpayer may terminate the election on or beforethe 1st day of the 3rd month of their taxable year

Opt-In/Registration ProcessHow can I register? Electronic Registration– Register electronicallythrough Department’sregistration portal attax.ohio.gov

Electronic RegistrationTo begin the registration process you must enableediting

Electronic RegistrationEnable content:

Electronic RegistrationAfter enabling content, select “Start Muni Registration”

Electronic Registration

Electronic Registration This page of theregistration formis required by alltaxpayers The availabilityof Schedule Aand B aredependent onthe answers tothe additionalquestions

Electronic RegistrationSchedule A

Electronic RegistrationSchedule B

Electronic RegistrationAfter completing your registration, Schedule A and Schedule B,select “Save File”. Once the file is saved, select “Email File toODT”

Electronic RegistrationMunicipal NetProfit TaxpayersFiling on aConsolidated Basisin SelectMunicipalities andSeparate in OtherMunicipalities

Opt-In/Registration ProcessPaper Registration Submit a paperregistration(form MNP-R)available ontax.ohio.gov/forms

Opt-In/Registration ProcessPaper Registration Schedule ofMunicipalitiesMNP-R –Schedule A

Opt-In/Registration ProcessPaper Registration Members of aConsolidatedGroup MNP-R –Schedule B

Opt-In/Registration Process Taxpayers that take advantageof early registration (prior toFebruary 5, 2018) will receivetheir municipal net profit taxaccount number andregistration confirmation letterin February 2018 If you’d like to confirm receiptof your registration earlier,please contact the Departmentat 1-844-238-040344

Opt-In/Registration ProcessTaxpayer’s Notification Requirements After registering with the commissioner– Taxpayers Currently Subject to the Municipal Net ProfitTax – Must notify all municipalities in which they wererequired to file a municipal net profit tax return in theyear preceding the opt-in with the Department– Taxpayers Subject to the Municipal Net Profit Tax for theFirst Time– No further notice required

Test Your KnowledgeQuestion:If I am a new business and registerwith the Department of Taxationfor the municipal net profit tax, doI need to notify any municipalcorporations?46

Test Your KnowledgeAnswer: No.Only taxpayers that weresubject to the municipalnet profit tax in thepreceding taxable year arerequired to notifymunicipalities that theyopted-in with theDepartment.47

Estimated PaymentsRequirements Submit quarterlydeclarations of estimatedtaxes– Exception: Taxpayerswith estimatedcombined tax liabilityless than 200 are notrequired to makeestimated payments

Estimated PaymentsImportant Dates Payments of estimated combined tax liability for thecurrent year are due as follows:– 22.5% must be paid by the fifteenth day of the fourth month oftheir taxable year.– 45% must be paid by the fifteenth day of the sixth month oftheir taxable year.– 67.5% percent must be paid by the fifteenth day of the ninthmonth of their taxable year.– 90% must be paid by the fifteenth day of the twelfth month oftheir taxable year. If the due date falls on a weekend or holiday, thereport or payment is due the next business day

Estimated PaymentsPlease see the chart below to find the applicable due dates:

Estimated PaymentsHow to Make Estimated Payments Electronic Filing – Municipal net profit taxpayersare required to file each declaration of estimatedtaxes electronically through the Gateway atohiobusinessgateway.ohio.gov. Electronic Payment – Municipal net profittaxpayers are required to remit each tax paymentelectronically either by ACH debit through theGateway or by electronic funds transfer (EFT)through the Ohio Treasurer of State attos.ohio.gov. Taxpayers may start filingdeclarations of estimated taxes andmaking estimated payments with theDepartment via the Gateway inFebruary 2018.

Estimated PaymentsUnderpayment of Estimated Taxes Underpayment of estimated taxes canresult in an interest penalty– Period of underpayment will runfrom due date of the estimatedpayment to the date payment ismade Safe harbors – the interest penalty willnot be applied if:– Estimated taxes paid equals atleast 90% of the tax for the currenttaxable year– Estimated taxes paid equals atleast 100% of the previous taxableyear52

Test Your KnowledgeQuestion:If my fiscal year-end is March 31stwhen is my first estimatedpayment due?

Test Your KnowledgeAnswer:July 15th

Tax Returns and PaymentsTaxpayers are able to do the samethings they can today and more! File on a consolidated basis File on a separate basis File on a consolidated basis and aseparate basis Use tax credits, NOLs, andunused credit carryforwards File using alternativeapportionment

Tax Returns and PaymentsHow will Returns be Filed? Electronic Filing – For taxable year 2018 andthereafter, municipal net profit taxpayers arerequired to file each annual tax returnelectronically through the Gateway atohiobusinessgateway.ohio.gov. Tax returnswill be available to file on the Gateway in late2018 for returns due in 2019. Electronic Payment – Municipal net profittaxpayers are required to remit each taxpayment electronically either by ACH debitthrough the Gateway or by electronic fundstransfer (EFT) through the Ohio Treasurer ofState at tos.ohio.gov. Taxpayers may startmaking estimated payments with theDepartment using the Gateway in February2018.

Tax Returns and PaymentsHow will Returns be Filed? Modernized eFiling (MeF)– The Department has had discussions withcommercial software vendors about buildingupload capability in their professional-suiteproducts.– The Department has contacted the IRS aboutparticipating in MeF

Tax ReturnWhen are Returns Due to the Department? Annual tax returns are due the 15th day of the fourthmonth following the end of the taxpayer’s taxableyear– Example – A taxpayer that has a fiscal year end ofNovember 30th will have an annual return duedate of March 15th

Tax ReturnPlease see the chart below to find the return due dates: