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H. B. No. 8 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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A BILL
To amend sections 5739.12 and 5747.07 of the Revised
Code to increase the sales and use tax prompt
remittance discount and to authorize a discount
for prompt remittance of income tax withholding.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5739.12 and 5747.07 of the Revised
Code be amended to read as follows:
Sec. 5739.12. (A)(1) Each person who has or is required to
have a vendor's license, on or before the twenty-third day of each
month, shall make and file a return for the preceding month in the
form prescribed by the tax commissioner, and shall pay the tax
shown on the return to be due. The return shall be filed
electronically using the Ohio business gateway, as defined in
section 718.051 of the Revised Code, the Ohio telefile system, or
any other electronic means prescribed by the commissioner. Payment
of the tax shown on the return to be due shall be made
electronically in a manner approved by the commissioner. The
commissioner may require a vendor that operates from multiple
locations or has multiple vendor's licenses to report all tax
liabilities on one consolidated return. The return shall show the
amount of tax due from the vendor to the state for the period
covered by the return and such other information as the
commissioner deems necessary for the proper administration of this
chapter. The commissioner may extend the time for making and
filing returns and paying the tax, and may require that the return
for the last month of any annual or semiannual period, as
determined by the commissioner, be a reconciliation return
detailing the vendor's sales activity for the preceding annual or
semiannual period. The reconciliation return shall be filed by the
last day of the month following the last month of the annual or
semiannual period. The commissioner may remit all or any part of
amounts or penalties that may become due under this chapter and
may adopt rules relating thereto. Such return shall be filed
electronically as directed by the tax commissioner, and payment of
the amount of tax shown to be due thereon, after deduction of any
discount provided for under this section, shall be made
electronically in a manner approved by the tax commissioner.
(2) Any person required to file returns and make payments
electronically under division (A)(1) of this section may apply to
the tax commissioner on a form prescribed by the commissioner to
be excused from that requirement. For good cause shown, the
commissioner may excuse the person from that requirement and may
permit the person to file the returns and make the payments
required by this section by nonelectronic means.
(B)(1) If the return is filed and the amount of tax shown
thereon to be due is paid on or before the date such return is
required to be filed, the vendor shall be entitled to a discount
of three-fourths of one five per cent of the amount shown to be
due on the return.
The discount authorized under this section,
when combined with the discount authorized under section 5747.07
of the Revised Code, may not exceed ten thousand dollars per
vendor per calendar year.
(2) A vendor that has selected a certified service provider
as its agent shall not be entitled to the discount if the
certified service provider receives a monetary allowance pursuant
to section 5739.06 of the Revised Code for performing the vendor's
sales and use tax functions in this state. Amounts paid to the
clerk of courts pursuant to section 4505.06 of the Revised Code
shall be subject to the applicable discount. The discount shall be
in consideration for prompt payment to the clerk of courts and for
other services performed by the vendor in the collection of the
tax.
(C)(1) Upon application to the tax commissioner, a vendor who
is required to file monthly returns may be relieved of the
requirement to report and pay the actual tax due, provided that
the vendor agrees to remit to the commissioner payment of not less
than an amount determined by the commissioner to be the average
monthly tax liability of the vendor, based upon a review of the
returns or other information pertaining to such vendor for a
period of not less than six months nor more than two years
immediately preceding the filing of the application. Vendors who
agree to the above conditions shall make and file an annual or
semiannual reconciliation return, as prescribed by the
commissioner. The reconciliation return shall be filed
electronically as directed by the tax commissioner, and payment of
the amount of tax shown to be due thereon, after deduction of any
discount provided in this section, shall be made electronically in
a manner approved by the commissioner. Failure of a vendor to
comply with any of the above conditions may result in immediate
reinstatement of the requirement of reporting and paying the
actual tax liability on each monthly return, and the commissioner
may at the commissioner's discretion deny the vendor the right to
report and pay based upon the average monthly liability for a
period not to exceed two years. The amount
ascertained by the
commissioner to be the average monthly tax liability of a vendor
may be adjusted, based upon a review of the returns or other
information pertaining to the vendor for a period of not less than
six months nor more than two years preceding such adjustment.
(2) The commissioner may authorize vendors whose tax
liability is not such as to merit monthly returns, as ascertained
by the commissioner upon the basis of administrative costs to the
state, to make and file returns at less frequent intervals. When
returns are filed at less frequent intervals in accordance with
such authorization, the vendor shall be allowed the discount
provided in this section in consideration for prompt payment with
the return, provided the return is filed and payment is made of
the amount of tax shown to be due thereon, at the time specified
by the commissioner, but a vendor that has selected a certified
service provider as its agent shall not be entitled to the
discount.
(D) Any vendor who fails to file a return or to pay the full
amount of the tax shown on the return to be due in the manner
prescribed under this section and the rules of the commissioner
may, for each such return, be required to forfeit and pay into the
state treasury an additional charge not exceeding fifty dollars or
ten per cent of the tax required to be paid for the reporting
period, whichever is greater, as revenue arising from the tax
imposed by this chapter, and such sum may be collected by
assessment in the manner provided in section 5739.13 of the
Revised Code. The commissioner may remit all or a portion of the
additional charge and may adopt rules relating to the imposition
and remission of the additional charge.
(E) If the amount required to be collected by a vendor from
consumers is in excess of the applicable percentage of the
vendor's receipts from sales that are taxable under section
5739.02 of the Revised Code, or in the case of sales subject to a
tax levied pursuant to section 5739.021, 5739.023, or 5739.026 of
the Revised Code, in excess of the percentage equal to the
aggregate rate of such taxes and the tax levied by section 5739.02
of the Revised Code, such excess shall be remitted along with the
remittance of the amount of tax due under section 5739.10 of the
Revised Code.
(F) The commissioner, if the commissioner deems it necessary
in order to insure the payment of the tax imposed by this chapter,
may require returns and payments to be made for other than monthly
periods.
(G) Any vendor required to file a return and pay the tax
under this section whose total payment for a year equals or
exceeds the amount shown in division (A) of section 5739.122 of
the Revised Code is subject to the accelerated tax payment
requirements in divisions (B) and (C) of that section. For a
vendor that operates from multiple locations or has multiple
vendor's licenses, in determining whether the vendor's total
payment equals or exceeds the amount shown in division (A) of that
section, the vendor's total payment amount shall be the amount of
the vendor's total tax liability for the previous calendar year
for all of the vendor's locations or licenses.
Sec. 5747.07. (A) As used in this section:
(1) "Partial weekly withholding period" means a period during
which an employer directly, indirectly, or constructively pays
compensation to, or credits compensation to the benefit of, an
employee, and that consists of a consecutive Saturday, Sunday,
Monday, and Tuesday or a consecutive Wednesday, Thursday, and
Friday. There are two partial weekly withholding periods each
week, except that a partial weekly withholding period cannot
extend from one calendar year into the next calendar year; if the
first day of January falls on a day other than Saturday or
Wednesday, the partial weekly withholding period ends on the
thirty-first day of December and there are three partial weekly
withholding periods during that week.
(2) "Undeposited taxes" means the taxes an employer is
required to deduct and withhold from an employee's compensation
pursuant to section 5747.06 of the Revised Code that have not been
remitted to the tax commissioner pursuant to this section or to
the treasurer of state pursuant to section 5747.072 of the Revised
Code.
(3) A "week" begins on Saturday and concludes at the end of
the following Friday.
(B) Except as provided in divisions (C) and (D) of this
section and in division (A) of section 5747.072 of the Revised
Code, every employer required to deduct and withhold any amount
under section 5747.06 of the Revised Code shall file a return and
shall pay the amount required by law as follows:
(1) An employer who accumulates or is required to accumulate
undeposited taxes of one hundred thousand dollars or more during a
partial weekly withholding period shall make the payment of the
undeposited taxes by the close of the first banking day after the
day on which the accumulation reaches one hundred thousand
dollars. If required under division (I) of this section, the
payment shall be made by electronic funds transfer under section
5747.072 of the Revised Code.
(2)(a) Except as required by division (B)(1) of this section,
an employer described in division (B)(2)(b) of this section if an
employer's actual and required payments under this section were at
least eighty-four thousand dollars during the twelve-month period
ending on the thirtieth day of June of the preceding calendar
year, the employer shall make the payment of undeposited taxes
within three banking days after the close of a partial weekly
withholding period during which the employer was required to
deduct and withhold any amount under this chapter. If required
under division (I) of this section, and the payment shall be made
by electronic funds transfer under section 5747.072 of the Revised
Code.
(b) For amounts required to be deducted and withheld during
1994, an employer described in division (B)(2)(b) of this section
is one whose actual or required payments under this section
exceeded one hundred eighty thousand dollars during the
twelve-month period ending June 30, 1993. For amounts required to
be deducted and withheld during 1995 and each year thereafter, an
employer described in division (B)(2)(b) of this section is one
whose actual or required payments under this section were at least
eighty-four thousand dollars during the twelve-month period ending
on the thirtieth day of June of the preceding calendar year.
(3) Except as required by divisions (B)(1) and (2) of this
section, if an employer's actual or required payments were more
than two thousand dollars during the twelve-month period ending on
the thirtieth day of June of the preceding calendar year, the
employer shall make the payment of undeposited taxes for each
month during which they were required to be withheld no later than
fifteen days following the last day of that month. The employer
shall file the return prescribed by the tax commissioner with the
payment.
(4) Except as required by divisions (B)(1), (2), and (3) of
this section, an employer shall make the payment of undeposited
taxes for each calendar quarter during which they were required to
be withheld no later than the last day of the month following the
last day of March, June, September, and December each year. The
employer shall file the return prescribed by the tax commissioner
with the payment.
(C) The return and payment schedules prescribed by divisions
(B)(1) and (2) of this section do not apply to the return and
payment of undeposited school district income taxes arising from
taxes levied pursuant to Chapter 5748. of the Revised Code.
Undeposited school district income taxes shall be returned and
paid pursuant to divisions (B)(3) and (4) of this section, as
applicable.
(D)(1) The requirements of division (B) of this section are
met if the amount paid, plus the discount allowed under division
(J) of this section, is not less than ninety-five per cent of the
actual tax withheld or required to be withheld for the prior
quarterly, monthly, or partial weekly withholding period, and the
underpayment is not due to willful neglect. Any underpayment of
withheld tax shall be paid within thirty days of the date on which
the withheld tax was due without regard to division (D)(1) of this
section. An employer described in division (B)(1) or (2) of this
section shall make the payment by electronic funds transfer under
section 5747.072 of the Revised Code.
(2) If the tax commissioner believes that quarterly or
monthly payments would result in a delay that might jeopardize the
remittance of withholding payments, the commissioner may order
that the payments be made weekly, or more frequently if necessary,
and the payments shall be made no later than three banking days
following the close of the period for which the jeopardy order is
made. An order requiring weekly or more frequent payments shall be
delivered to the employer personally or by certified mail and
remains in effect until the commissioner notifies the employer to
the contrary.
(3) If compelling circumstances exist concerning the
remittance of undeposited taxes, the commissioner may order the
employer to make payments under any of the payment schedules under
division (B) of this section. The order shall be delivered to the
employer personally or by certified mail and shall remain in
effect until the commissioner notifies the employer to the
contrary. For purposes of division (D)(3) of this section,
"compelling circumstances" exist if either or both of the
following are true:
(a) Based upon annualization of payments made or required to
be made during the preceding calendar year and during the current
calendar year, the employer would be required for the next
calendar year to make payments under division (B)(2) of this
section.
(b) Based upon annualization of payments made or required to
be made during the current calendar year, the employer would be
required for the next calendar year to make payments under
division (B)(2) of this section.
(E)(1) An employer described in division (B)(1) or (2) of
this section shall file, not later than the last day of the month
following the end of each calendar quarter, a return covering, but
not limited to, both the actual amount deducted and withheld and
the amount required to be deducted and withheld for the tax
imposed under section 5747.02 of the Revised Code during each
partial weekly withholding period or portion of a partial weekly
withholding period during that quarter. The employer shall file
the quarterly return even if the aggregate amount required to be
deducted and withheld for the quarter is zero dollars. At the time
of filing the return, the employer shall pay any amounts of
undeposited taxes for the quarter, whether actually deducted and
withheld or required to be deducted and withheld, that have not
been previously paid. If required under division (I) of this
section, the payment shall be made by electronic funds transfer.
The tax commissioner shall prescribe the form and other
requirements of the quarterly return.
(2) In addition to other returns required to be filed and
payments required to be made under this section, every employer
required to deduct and withhold taxes shall file, not later than
the thirty-first day of January of each year, an annual return
covering, but not limited to, both the aggregate amount deducted
and withheld and the aggregate amount required to be deducted and
withheld during the entire preceding year for the tax imposed
under section 5747.02 of the Revised Code and for each tax imposed
under Chapter 5748. of the Revised Code. At the time of filing
that return, the employer shall pay over any amounts of
undeposited taxes for the preceding year, whether actually
deducted and withheld or required to be deducted and withheld,
that have not been previously paid. The employer shall make the
annual report, to each employee and to the tax commissioner, of
the compensation paid and each tax withheld, as the commissioner
by rule may prescribe.
Each employer required to deduct and withhold any tax is
liable for the payment of that amount required to be deducted and
withheld, whether or not the tax has in fact been withheld, unless
the failure to withhold was based upon the employer's good faith
in reliance upon the statement of the employee as to liability,
and the amount shall be deemed to be a special fund in trust for
the general revenue fund.
(F) Each employer shall file with the employer's annual
return the following items of information on employees for whom
withholding is required under section 5747.06 of the Revised Code:
(1) The full name of each employee, the employee's address,
the employee's school district of residence, and in the case of a
nonresident employee, the employee's principal county of
employment;
(2) The social security number of each employee;
(3) The total amount of compensation paid before any
deductions to each employee for the period for which the annual
return is made;
(4) The amount of the tax imposed by section 5747.02 of the
Revised Code and the amount of each tax imposed under Chapter
5748. of the Revised Code withheld from the compensation of the
employee for the period for which the annual return is made. The
commissioner may extend upon good cause the period for filing any
notice or return required to be filed under this section and may
adopt rules relating to extensions of time. If the extension
results in an extension of time for the payment of the amounts
withheld with respect to which the return is filed, the employer
shall pay, at the time the amount withheld is paid, an amount of
interest computed at the rate per annum prescribed by section
5703.47 of the Revised Code on that amount withheld, from the day
that amount was originally required to be paid to the day of
actual payment or to the day an assessment is issued under section
5747.13 of the Revised Code, whichever occurs first.
(5) In addition to all other interest charges and penalties
imposed, all amounts of taxes withheld or required to be withheld
and remaining unpaid after the day the amounts are required to be
paid shall bear interest from the date prescribed for payment at
the rate per annum prescribed by section 5703.47 of the Revised
Code on the amount unpaid, in addition to the amount withheld,
until paid or until the day an assessment is issued under section
5747.13 of the Revised Code, whichever occurs first.
(G) An employee of a corporation, limited liability company,
or business trust having control or supervision of or charged with
the responsibility of filing the report and making payment, or an
officer, member, manager, or trustee of a corporation, limited
liability company, or business trust who is responsible for the
execution of the corporation's, limited liability company's, or
business trust's fiscal responsibilities, shall be personally
liable for failure to file the report or pay the tax due as
required by this section. The dissolution, termination, or
bankruptcy of a corporation, limited liability company, or
business trust does not discharge a responsible officer's,
member's, manager's, employee's, or trustee's liability for a
failure of the corporation, limited liability company, or business
trust to file returns or pay tax due.
(H) If an employer required to deduct and withhold income tax
from compensation and to pay that tax to the state under sections
5747.06 and 5747.07 of the Revised Code sells the employer's
business or stock of merchandise or quits the employer's business,
the taxes required to be deducted and withheld and paid to the
state pursuant to those sections prior to that time, together with
any interest and penalties imposed on those taxes, become due and
payable immediately, and that person shall make a final return
within fifteen days after the date of selling or quitting
business. The employer's successor shall withhold a sufficient
amount of the purchase money to cover the amount of the taxes,
interest, and penalties due and unpaid, until the former owner
produces a receipt from the tax commissioner showing that the
taxes, interest, and penalties have been paid or a certificate
indicating that no such taxes are due. If the purchaser of the
business or stock of merchandise fails to withhold purchase money,
the purchaser shall be personally liable for the payment of the
taxes, interest, and penalties accrued and unpaid during the
operation of the business by the former owner. If the amount of
taxes, interest, and penalties outstanding at the time of the
purchase exceeds the total purchase money, the tax commissioner in
the commissioner's discretion may adjust the liability of the
seller or the responsibility of the purchaser to pay that
liability to maximize the collection of withholding tax revenue.
(I)(1) An employer described in division (I)(2) of this
section If an employer's payments under this section exceeded
eighty-four thousand dollars during the twelve-month period ending
on the thirtieth day of June of the preceding calendar year, the
employer shall make all payments required by this section for the
year by electronic funds transfer under section 5747.072 of the
Revised Code.
(2)(a) For 1994, an employer described in division (I)(2) of
this section is one whose actual or required payments under this
section exceeded five hundred thousand dollars during the
twelve-month period ending June 30, 1993.
(b) For 1995, an employer described in division (I)(2) of
this section is one whose actual or required payments under this
section exceeded five hundred thousand dollars during the
twelve-month period ending June 30, 1994.
(c) For 1996, an employer described in division (I)(2) of
this section is one whose actual or required payments under this
section exceeded three hundred thousand dollars during the
twelve-month period ending June 30, 1995.
(d) For 1997 through 2000, an employer described in division
(I)(2) of this section is one whose actual or required payments
under this section exceeded one hundred eighty thousand dollars
during the twelve-month period ending on the thirtieth day of June
of the preceding calendar year.
(e) For 2001 and thereafter, an employer described in
division (I)(2) of this section is one whose actual or required
payments under this section exceeded eighty-four thousand dollars
during the twelve-month period ending on the thirtieth day of June
of the preceding calendar year.
(J) If the return required by this section is filed, and the
amount of tax shown to be due on the return is paid, on or before
the day required by this section, the employer is entitled to a
discount equal to five per cent of the amount of undeposited taxes
remitted. The discount authorized under this section, when
combined with the discount authorized under section 5739.12 of the
Revised Code, may not exceed ten thousand dollars per employer per
calendar year. With respect to each employee, the discount
retained by the employer shall be considered to have been remitted
for purposes of reporting the state and school district income tax
deducted and withheld from the employee's compensation under
section 5747.06 of the Revised Code and for purposes of
determining the state and school district income tax paid by the
employee.
Section 2. That existing sections 5739.12 and 5747.07 of the
Revised Code are hereby repealed.
Section 3. That the amendment by this act of sections 5739.12
and 5747.07 of the Revised Code applies to returns filed under
those sections on and after the first day of the first month
beginning on or after the effective date of this act. For the year
in which this act takes effect, the $10,000-per-calendar-year
limitation on the discount allowed under those sections shall be
reduced ratably according to the number of months in that year
ending before the first month in which those sections apply.
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