OSCPA action sparks tax fix to Form IT/SD 2210

Written on May 17, 2018

OSCPA staff report

OSCPA action has led to a forthcoming fix of an unclear tax policy that was costing businesses money.

The issue was brought to OSCPA’s attention in March through the society’s Tax Special Interest Section discussion group. A member had a client who just missed the "Safe Harbor" on estimated payments by $50 and wound up owing thousands with a large penalty.

OSCPA’s Tax Policy Director Greg Saul, Esq., CAE, said he and two OSCPA members soon thereafter met with Ohio Department of Taxation officials and discussed the issue with them.

“There was no legislative change by statute, but a re-interpretation by ODT of what the current law actually says,” Saul wrote. The impacted statutes were R.C. 5747.09 and R.C. 5747.43.

The Department of Taxation in April issued an alert that reiterated its position, prompting the Society to act. The alert stated that ODT posted the updated version of form IT/SD 2210 in September 2017 on its website, and the changes would apply “beginning with tax year 2017.”

“OSCPA is going to seek a legislative change because ODT is not backing off their new interpretation of the statute,” Saul wrote in April. “The change will seek to mirror what is done at the federal level (and what was previously done in Ohio) where the lower of the two calculations can be used. Unfortunately, ODT’s tax alert is now their policy until a legislative fix can be enacted.”

That legislative fix came a step closer to reality on Wednesday when the Ohio Senate approved an amendment to House Bill 133. The amendment applies retroactively to taxable years beginning on or after January 1, 2017, so ultimately taxpayers should be able to seek refunds of the 2017 penalties.

House Bill 133, called the “Disaster Relief Act,” on its surface exempts out-of-state disaster businesses and qualifying out-of-state employees from some taxes and laws having to do with certain types of disaster-related work in Ohio.

Before a vote Wednesday morning in the Senate Ways & Means Committee, State Sen. John Eklund, R-Munson Township, who offered the amendment, said it would change the calculation of interest penalties on estimated taxes that are underpaid during the course of the year for certain individuals and pass-through entities. As requested by OSCPA, it would provide uniformity and clarity to taxpayers by mirroring the process used on the federal level.

The bill is expected to be approved in an upcoming House floor concurrence vote before going to the governor to be signed into law.

1 comment

Leave a comment
  1. tom | May 17, 2018
    This was nothing more than a money grab by the state. Thanks for your advocacy.

    Leave a comment

    Upcoming Events