Businesses Owed Millions in Tax Refunds
The Ohio Department of Taxation owes millions of dollars in tax refunds to businesses that inadvertently overpaid their taxes. Now department officials are making contact with the businesses to make sure they are refunded every dollar owed to them.
The department has identified about $30 million owed to business taxpayers and will be contacting those businesses and helping them apply for their refund. This new wave of refunds involves three taxes:
- Sales and use
- Corporate franchise
- Employer and school district withholding
Find out whether your business is eligible for a refund by calling 800-304-3211, or contact the department via email.
The tax department’s practice of not notifying taxpayers of overpayments came to light through an investigation by the Ohio Inspector General. A report released in mid-November cited the department for failure to make refunds even after requests were submitted. In addition, the department did not have standard written policies or procedures for handling overpayments.
State law does not require the department to notify taxpayers of overpayments; however, the law stipulates that overpayments are refundable upon request within three or four years, depending on the type of tax. Money not requested within the statute of limitations is kept by the state.
Overpayments are common because businesses generally make payments in advance based on estimates of what they will owe.
Ohio Tax Commissioner Joe Testa was surprised by the investigation’s findings and directed department officials to immediately make arrangements for tax refunds. He indicated the practice of not making refunds was part of the culture of the department and had been going on for years.
To address the issue, Reps. Mike Duffey, R-Worthington and Michael Stinziano, D-Columbus, are co-sponsoring legislation requiring the Ohio Department of Taxation to notify businesses when they have overpaid their taxes and qualify for a refund. Governor Kasich supports their initiative.
Nearly a year ago, the Department of Taxation discovered there were overpayments associated with the commercial activity tax (CAT) and began issuing refunds totaling $14 million to 3,500 companies that had overpaid.