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Ohio Use Tax - New For Tax Year 2000

An Online Pamphlet By Frank E. Fogg - Public Accountant

Many Ohio residents are in for a special surprise when they receive their 2000 Ohio State Income Tax booklet. A new line has been added to compute and pay the "Use Tax."

What it is: The "Use Tax" is not really a new tax at all. It was enacted over 50 years ago to place Ohio retailers on a fair  footing with their out-of-state competitors. In its simplest terms, the "Use  Tax" is a sales tax on out-of-state purchases when sales tax was not been collected  at the time of sale.

What is covered: Most personal out-of-state  purchases from catalogs and via the web are subject to this tax whenever sales tax has not been collected. The taxpayer must review each out-of-state purchase  receipt to determine if sales tax has been collected. I recommend keeping a  list of purchases. Keep track of those purchases that have had sales tax collected and those that have not, and store this information with your other permanent  tax records.

How it is computed: To calculate the use tax  amount, total your out-of-state purchases that did not include sales tax, then  multiply this amount by the sales tax rate of you residence county. A worksheet is included in the Ohio tax booklet to assist the computation of the tax and has a sales tax rate sheet that includes each Ohio county.

Although most taxpayers will not be happy with this addition to the Ohio Income Tax Return for 2000, it is important to properly compute and pay the "Use Tax" at the time the return is filed.


 



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