Ohio State and Local Tax Updates June 2019

Attention, Ohio disaster victims!

June 26, 2019

Attention, Ohio disaster victims: Victims of storms, tornadoes, flooding and landslides may receive tax relief, the IRS announced. Due to severe weather that commenced on May 27, several OH counties have been declared federal disaster areas. The counties include Auglaize, Darke, Greene, Hocking, Mercer, Miami, Montgomery, Muskingum, Perry and Pickaway. Victims in these counties may qualify for individual assistance, and have extra time to complete tax-related tasks such as filing returns and making payments. In addition, penalties on payroll tax deposits due on or after May 27, and before Sept. 30, will be abated if deposits were made before Sept. 30.

doctrine of “cy pres” doesn’t apply in Ohio foreclosures

June 26, 2019

The doctrine literally means “as near as possible.” It allows a court to rewrite a charitable gift or trust so that it’s no longer impracticable to carry out in an estate settlement. In this case, a trial court had ordered, under the doctrine, that the remaining proceeds from the sale of the taxpayers’ foreclosed property be distributed to a county foundation to provide legal services for the indigent. However, the OH Court of Appeals held in favor of the taxpayer and reversed the ruling. It found that the trial court couldn’t apply a doctrine originating from trusts and estates law to the foreclosure case. (Dkt. No. 2019-CA-1)

Ohio issues new sales and use tax rates by county

June 19, 2019

Ohio has issued new sales and use tax rates by county, effective July 1, 2019. You can see a list of the rates on the Ohio Department of Taxation website at http://bit.ly/2X7jYym. Scroll down to “2019 rate changes.” Then click on “3rd Quarter (effective July 1, 2019 – Sept. 30, 2019).” Rates are listed by county and transit authority, and by city or village and ZIP code.


An occupancy fee in East Cleveland held unconstitutional

June 19, 2019

The taxpayers-property owners owned rental properties. The city raised its occupancy fee on rental properties from $10 to $100 per unit. The taxpayers challenged the increase, arguing that the charge wasn’t a fee, but a tax. The funds collected weren’t allocated solely for inspection activities, as the city had described them. Rather, they were deposited in the city’s general fund and were used for unspecified expenditures. Thus, the Ohio Court of Appeals affirmed a trial court opinion that the fee was an illegal tax disguised as a fee. (Dkt. No. 107475)


Several Ohio municipalities opt for service from RITA

June 12, 2019

Several Ohio municipalities are opting for service from the Regional Income Tax Agency (RITA). Effective July 1, the following municipalities have chosen RITA to administer their municipal income tax. They are Batavia, Bellville, Bethel, Columbiana, Crestline and Pomeroy. Bethel begins a municipal income tax rate of 0.5% on July 1. See a list of new OH municipalities that have joined RITA as well as tax rate changes here: http://bit.ly/2Iq2cxa.



Burden of proof is on the taxpayer

June 12, 2019

The burden of proof was on the manufacturer. The Ohio Board of Tax Appeals (BTA) affirmed the use tax assessment against the taxpayer based on its failure to show error in the tax commissioner’s determination. The business had been assessed following an audit of its purchases over three years. In its notice of appeal, the taxpayer argued that many of the purchases resulting in the assessment qualified for the manufacturing exemption. But the BTA ruled that such statements didn’t rise to the level of evidence that the BTA requires. It noted that it’s not its duty to sift through the invoices and other documents that the taxpayer provided to make a determination.


Attention businesses: The deadline for estimated payments in Ohio draws near

June 5, 2019

The Ohio Department of Taxation is reminding all calendar-year taxpayers that the second declaration and estimated payment for the 2019 tax year is due by June 17, 2019. Taxpayers that have elected to have the department administer the tax for their companies must file declarations and make estimated payments directly to the department via the Ohio Business Gateway or its Modernized e-File.



Ohio: Pre-manufacturing materials not exempt from use tax

June 5, 2019

Cleveland’s municipal admissions tax is deemed constitutional. The taxpayer, a ticket broker that resold tickets to sporting-entertainment events, had filed a complaint seeking a declaration that the city’s ordinance was unconstitutional. The tax imposes an 8% tax on each person who pays an admission charge to indoor and outdoor theaters, amusement parks and similar venues. The broker argued that the admission tax isn’t a true tax on admissions, but instead is a tax on the ticket broker’s profits. The Ohio Court of Appeals disagreed, and noted that the taxpayer cited no authority to suggest that the city couldn’t validly impose taxes upon the resale charge.


© 2019

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