Ohio will return $13 million in tax overpayments to businesses that don't know they were owed money. The new policy will automatically tell businesses when they're eligible for a refund.
Governor John Kasich joined Ohio Department of Taxation (ODT) Commissioner Joe Testa in beginning to return the funds to 3,500 Ohio businesses that unknowingly overpaid their Commercial Activity Tax (CAT). The refunds are the first from a new policy that reverses previous anti-business practices and instead notifies a business taxpayer when they've made an overpayment and helps them with the process of reclaiming their money.
In the past, ODT didn't notify businesses of overpayments—even if the Department was aware of it—but instead made businesses discover the error themselves and then ask for their money back. If businesses failed to discover the error within a certain amount of time then they forever lost the right to reclaim it.
"If government knows a job creator paid too much in taxes then it should do the right thing and give the money back, because government works for us, not the other way around. It's just simple fairness and I can't believe this wasn't being done already. It's yet another example of a wrong-headed thing that state government was doing that we discovered and are fixing. I just can't figure out why no one was trying to fix these kinds of problems before," said Kasich in a news release.
To help create a more jobs-friendly climate, ODT is implementing the new policy beginning with the CAT and will begin notifying about 3,500 taxpayers who may have overpaid by a total of as much as $13.7 million. Other taxes will be analyzed in the months ahead and ODT will begin reaching out to all taxpayers who unknowingly paid too much tax. The Department will work to raise the visibility and understanding of tax refund procedures and will notify taxpayers who appear to have a refund due.
Refund request forms and more information about this program are available at the ODT web site: www.tax.ohio.gov.