Cleveland Plain Dealer - Ohio should remedy Tax Department's code of silence on business-tax refunds now: Editorial
State law hasn’t required the Taxation Department to notify business taxpayers when they overpay certain taxes. The law didn’t forbid notification, either. But Taxation’s unpublicized policy was silence. It didn’t tell businesses they overpaid employer withholding (for state and school district income taxes; sales and use tax; and the (now-downsized) corporate franchise tax.
And, in a neat twist for the bureaucracy, Ohio law says the state gets to keep refunds not claimed within three or four years, depending on the tax.
That wasn’t just unfair. Unclaimed credit balances sloshing around Taxation’s cashbox let one department employee, for a time, mask thefts. Meyer’s probe of that led to discovery of the department’s no-tell refund policy.
It’s unclear how much, in overpayments, Taxation swept out of taxpayers’ sight. The consensus appears to be that about $30 million in “un-notified” overpayments is eligible for refunding. Additionally, the administration of Gov. John Kasich, which inherited this mess, has acted swiftly to refund $13 million in overpaid Commercial Activity Tax to about 3,500 businesses.
A quartet of GOP legislators (Reps. Mike Duffey of suburban Columbus and Al Landis of Dover, Sens. Bob Peterson of southwest Ohio’s Clinton County and Bill Beagle of suburban Dayton) is backing a bill to require Taxation to notify businesses when they overpay taxes – and refund the overpayment or apply it as a credit on future taxes. No one can seriously oppose such a measure. The sooner the House and Senate pass it, the better.