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Ohio Won’t Keep Tax Overpayments Anymore


 Does the Ohio Department of Taxation owe your business a refund? Thanks to a new policy, you should get it.

Imagine this: Your business owes money to your state department of revenue. You know this, but instead of stepping forward and paying what you owe, you keep silent and hope the department of revenue won’t notice. If no one asks you for that money within a four-year period, you’ll be able to keep it.

That’s the way it used to work in Ohio, where it has come to light that the Department of Taxation was “keeping a secret from businesses that they had overpaid their taxes and then was … playing games about returning their money” (Ohio Tax Comissioner, Joe Testa). Businesses were not given refunds unless they “caught the mistake themselves and asked for their money back, and then refunds were only made for the amount the taxpayer requested.” If no request was made after four years, unclaimed refunds were confiscated.

No more. Last year, Governor John Kasich (R) charged Tax Commissioner Testa with “putting an end” to that practice. On November 21, 2013, Testa announced that “Ohio will now always notify businesses of accidental overpayments and return their money—even if they don’t know and even if they don’t know the precise amount."

According to the tax commissioner, the state owes “about $30 million” to business taxpayers—mostly for sales and use tax, corporate franchise tax, and employer and school district withholding overpayments. More than $10 million in commercial activity tax has already been refunded. Overpayment of taxes typically occurs for several reasons: sometimes there are errors in processing, filing or data entry; sometimes businesses fail to take into account advance payments.

Businesses that have overpaid taxes can expect to hear form the Ohio Department of Taxation in the near future. They’ll be told how to apply for a refund. Any business taxpayer who thinks they’ve overpaid should contact the Ohio Department of Taxation at 1-800-304-3211 or by email to www.tax.ohio.gov.

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photo credit: 401(K) 2013 via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.