A provision of the budget bill signed into law over the summer established a tax amnesty program that will run from Jan. 1, 2018, to Feb. 15, 2018, and the Ohio Department of Taxation is selling it with vigor. In a publication titled Ohio Tax Amnesty Starts Soon!, the department explained that “[i]f you have unpaid taxes, Ohio Tax Amnesty could help you avoid 100 percent of penalties and 50 percent of interest due.” The publication offers a link to a savings calculator for taxpayers “to see potential savings with Ohio Tax Amnesty. This opportunity ends Feb. 15, 2018 -don't miss your chance to save!”
A different page of OhioTaxAmnesty.gov points out that a taxpayer can apply for amnesty if he or she “has unreported or underreported taxes that were due and payable as of May 1, 2017.” Unreported taxes are those that the taxpayer knows he or she owes, but for which the Department has not yet contacted the taxpayer.
Amnesty is available for only the following types of unpaid taxes:
- Individual income tax
- Individual school district income tax
- Employer withholding tax
- Employer withholding school district Income tax
- Pass-through entity tax
- Sales tax
- Use tax
- Commercial activity tax (CAT)
- Financial institutions tax
- Cigarette or other tobacco products tax
- Alcoholic beverage taxes
The Ohio Department of Taxation reserves the right to deny amnesty for any of the following reasons:
- The application submitted was for taxes that do not qualify for amnesty.
- Eligible taxes were not due and payable as of May 1, 2017.
- The Ohio Department of Taxation has issued a billing or assessment notice for the taxes on the application.
- The Ohio Department of Taxation has already started an audit of the taxes for which the taxpayer requested amnesty.
- Failure to include the correct application, complete return(s) and full payment.
The department will mail a letter to taxpayers who requested amnesty indicating whether the application was approved or denied within 30 days after receipt of the application.
According to the department, “[n]ot only will you get a fresh start, you could save significantly on penalties and interest. Ohio Tax Amnesty is a great opportunity to move forward and settle your unpaid taxes.”
The excitement with which the department is presenting its program is curious, because amnesty in general is controversial, as we have discussed in the past. For example, one of our March articles referenced the information hub TaxLinked.net, which addressed the pros and cons of such programs. It pointed out that tax amnesty can reduce auditing costs, increase government revenue, and give taxpayers a chance to correct mistakes they have made due to unduly complex tax laws. On the other hand, some say that it is unfair to compliant taxpayers, and sends the message that it is acceptable to fail to pay one’s taxes. This may be why Ohio is the only state that has scheduled an amnesty program for 2018 as of yet.
Driver’s license reinstatement amnesty
Earlier this month, House lawmakers passed a different kind of amnesty program. According to a post on the Majority Caucus Blog, the driver’s license Reinstatement Fee Amnesty Initiative, set forth in HB 336 and passed on Dec. 13, 2017, “would establish a temporary six-month debt reduction and waiver program for individuals who had their licenses suspended for a variety of reasons, with the exception of offenses involving alcohol, drugs or a deadly weapon.”
The blog post describes the program’s intention: “to help indigent Ohioans who are unable to afford the reinstatement fee or fines that they have accrued throughout their license suspension…many of these individuals continue to drive, risking further financial repercussion for either themselves or other drivers on the road.”
HB 336 contemplates these eligibility requirements for a fee reduction or total waiver:
- An individual’s suspension must have been in effect for at least 18 months.
- The individual must be indigent.
- The individual must have completed all court-ordered sanctions other than paying the reinstatement fee.
The goal is “to create a reasonable, practical, and measured attempt to make sure that Ohioans are legal to drive with a valid driver’s license and insurance while driving through our neighborhoods and on our interstates.”
The driver’s license Reinstatement Fee Amnesty Initiative is a Buckeye Pathway bill. Buckeye Pathway is a House of Representatives agenda, rooted in conservative principles, that focuses “on policies that improve the economic environment, enhance opportunities for all Ohioans, and strengthen families and communities throughout the state.” The agenda’s details flow from four policy pillars: competitiveness, education systems, healthcare and energy.
The Buckeye Pathway cornerstones are:
- Improving the Economic Environment by way of tax certainty, regulatory fairness, and modernization of infrastructure, among other things.
- Enhancing opportunities, by focusing on matters such as success in the classroom and licensure reform.
- Strengthening families and communities with access to quality health care, purpose driven sentencing reform, and the like.