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Information Release

ST 2007-06 -

Sales and Use Tax: Accelerated and Electronic Sales and Use Tax

Payments – Issued December 2007

The purpose of this information release is to explain recent changes to state law and new

procedures for taxpayers who are required to pay sales and use tax by electronic funds

transfer (EFT) and therefore make accelerated payments of the sales and use tax.

Taxpayers whose liability exceeds $75,000 in any calendar year are required to pay sales

and use tax by electronic funds transfer (EFT) and to make accelerated payments for the

second ensuing and each succeeding year.

These basic requirements haven’t changed. But in an effort to simplify compliance for

taxpayers required to make accelerated payments, language enacted last June by the Ohio

General Assembly has changed the accelerated payment schedule so that only one

accelerated payment is due each month.

Understanding the new accelerated payment schedule

For taxpayers required to make accelerated payments, the payment must be made by the

23rd day of the month for which the tax is due. This is the same day on which the previous

month’s tax return is also due. The remaining tax due for the month must be paid when the

tax return for that month is filed by the 23rd day of the following month.

For example, during the month of March, an accelerated payment is due on or before March

23, when the February tax return is due. The balance of the tax due for March is to be filed

and paid on or before April 23, when the March tax return is due. To calculate the remaining

balance due, subtract the amount of the accelerated payment made on or before March 23

from the tax due. The resulting “Balance Due” is paid on or before April 23.

Note: If the due date of any payment and/or return falls on a weekend or a holiday, then the

due date is the next banking day.

Accelerated payment requirements

An accelerated payment must be equal to at least 75 percent of the anticipated tax liability for

that month. If a taxpayer makes a payment that is less than 75 percent of the actual liability

for that month, the commissioner may impose an additional charge not to exceed 5 percent of

the unpaid amount. This charge, which is intended to encourage taxpayer compliance, is

unlikely to be applied to taxpayers that are attempting to comply with accelerated payment

requirements. This subject is discussed in greater detail below.

Taxpayers have the option to make just one payment per month that includes both the

accelerated payment, and the balance due for the previous month’s return. An additional line

will be added to tax returns beginning with the return for January 2008 to show such

accelerated payments. For example, a March 2008 return, filed and paid on or before April

23, can include the amount of the April accelerated payment (which would be shown on the

new line on the return) and paid together with the balance of the tax due for March in one

payment. The Department of Taxation will credit the amount designated by the taxpayer on

the accelerated payment line to the next return period.

Taxpayers may also continue to make accelerated payments separate from the return

payment. A taxpayer who chooses to do this should leave blank the new line on the tax

return designated for “Accelerated payment for next reporting period.”

Accelerated payments, if not paid with the tax return, can be made separately through the

Treasurer of State, the Ohio Business Gateway, and Ohio Telefile.

Electronic payment options

Information Release - St 2007-06 - Sales And Use Tax: Accelerated And Electronic Sales And Use Tax Payments - Issued December 2007

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