Share |

What is Use Tax?

A use tax is similar to a sales tax in its application. Use tax is imposed on the "storage, use or other consumption" of all tangible personal property and the receipt of certain services that are subject to sales tax. Purchases that are properly exempt from sales tax are also exempt from the use tax. Use tax must be paid on all purchases made by Ohio residents and businesses if the proper amount of sales tax has not been paid to the vendor, seller, or service provider. The use tax rate is equal to the sales tax rate in effect in the county where the property is used or benefit of the service is received by the purchaser.

The most common situation that gives rise to a use tax liability is when an Ohio customer makes a mail order purchase from an out-of-state seller. Use tax is also due when the purchaser improperly claims exemption from the sales tax or if the sales tax paid is less than the total use tax in effect in the county where the item is used or benefit of the service is received.

One of the main reasons for the use tax is to protect Ohio vendors from unfair competition from out-of-state sellers, since the in-state merchant is required to collect sales tax when selling to an Ohio resident or business. All states that have a sales tax have a use tax.

Our Department sources have advised that they will begin contacting Ohio businesses in the coming months concerning their Ohio use tax liability.

We have been told that Pennsylvania had a very successful Use Tax campaign and Ohio is looking to do the same.

Only a small fraction of the more than 380,000 registered Ohio businesses have a use tax account. The Department is finally addressing this great discrepancy by planning to contact and investigate all Ohio businesses without an Ohio Use Tax account. Furthermore, the general four-year statute of limitations will not apply if a use tax return has not been filed, meaning the potential liability for tax, interest and penalty (15%) is substantial, as the audit period is unlimited (although the Department’s policy is to only review the prior seven years). On the other hand, by requesting a voluntary disclosure agreement (“VDA”), a taxpayer can limit its exposure to the previous three years (tax and interest) and avoid penalties.

Source: Ohio Department of Taxation

"I have found them to be very approachable and available to assist us in any way possible. They have always exuded professionalism and honesty in all of our transactions. Based on my experience, I would recommend Schlabig & Associates to any firm seeking a reliable accounting firm."
– Robert B. Trammell
General Manager, Sheraton Suites, Akron/Cuyahoga Falls
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"With the knowledgeable assistance of Schlabig & Associates, MB Kit Systems has beaten the odds and made the transition from start-up to successful. I have no reservations recommending Schlabig & Associates as a trusted and professional accounting firm."
– Eveline Nordhauss
President, MB Kit Systems, Inc.
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"We've partnered with Schlabig for well over 20 years. When we made the change years ago, Schlabig brought a refreshing level of professionalism to our business. As the years have passed, Schlabig has kept ahead of the technology curve, making it much easier for us and much more cost effective."
– Rick Bissler
Bissler & Sons Funeral Home and Crematory, Kent, Ohio
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"The Schlabig team has served my individual and corporate needs for two decades. The relationship has been marked by excellent work, timely responses and accommodating service at every opportunity."
– Rich Jusseaume
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"Schlabig and Associates provides high quality, professional accounting services together with a personal touch. I feel strongly that I'm doing business with a trusted advisor who cares about my financial success and offers ideas, solutions and best practices to help me maximum my income."
– Andy Haag
Lawyer, Regas & Haag, Ltd., Canton, Ohio
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"Our relationship with Tom and his team at Schlabig is invaluable! The relationship started in 2010 when we outgrew our existing firm. Schlabig offered the Experience, 21st century knowledge and the relationship accounting we were looking for. They are more than just our accountants, they are part of our team!
– Chris McPhie
JD Byrider Superstores
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"I have been fortunate to have Tom Hager and Schlabig & Associates as my accountants since 1979. During those years I have always found Tom to be generous with his time. He has always ensured that any questions I may have about a particular issue are answered to my satisfaction. I know I can always rely on Tom. "
– Richard Schaack
Davey Industries, Ravenna, OH
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"If you're looking for integrity, honesty, responsibility and respect, these qualities are all found in Tom Hager, a man of high merit, and his firm, Schlabig & Associates."
– Robert Ackworth
Kent, Ohio
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.

"Schlabig is remarkably customer centric. I recently had a question late on a Friday afternoon. Knowing she was on vacation, I sent my Schlabig representative an email requesting a call during the following week. Within two minutes of my email she was on the phone with the answer I needed."
– Drew Shippy
President, Pinnacle Communication Group, Inc.
(Read More)

Advising clients how to keep more of what they earn,
with no surprises.