On January 6, 2023, Ohio Governor Mike DeWine signed into law H.B. 45, which, among other provisions, authorized the Director of Budget and Management (the “Director”) to create a two-month tax amnesty program before November 1, 2023. If implemented, the amnesty program would apply to a wide range of delinquent state business taxes, including the state’s commercial activity tax and the sales and use tax, but not to local or municipal taxes. The state’s public utility excise tax and wireless 911 surcharges are also covered under H.B. 45.
Under H.B. 45, the Director may approve a state tax amnesty program only if she determines that “the General Revenue Fund will require additional proceeds from the amnesty program to meet obligations required to be paid from that fund in calendar year 2023.” If the Director concludes that a tax amnesty is necessary, she will certify the finding to the tax commissioner, the Ohio governor, and legislative leaders designated by the statute. The tax commissioner will then establish and administer the program.
If an amnesty program is approved and properly certified, it will not excuse any liability for unpaid taxes themselves. Instead, taxpayers who fully pay off qualifying taxes and fees during the two-month amnesty period will owe no penalties or interest that would normally be imposed on their late payments. Thus, delinquent taxpayers will continue to owe unpaid taxes until they pay them off in full, discharge the debt through bankruptcy (if the taxes are eligible), or enter into (and comply with) a payment plan with the Ohio Department of Taxation.
At this time, we cannot predict if an amnesty program will ultimately be created, or when in 2023 the amnesty period would start and end. And even if an amnesty is approved and certified, it is always possible that it might not cover all state taxes authorized by H.B. 45. Therefore, impacted entities should plan accordingly and actively monitor developments relating to the implementation of H.B. 45.
If your company is delinquent with its state tax payments in Ohio, we encourage you to contact Allison Rule at (703) 714-1312 or firstname.lastname@example.org, to discuss your options.