(A) Division (C) of
section 5751.05 of the Revised Code
allows the tax commissioner to grant written approval for a calendar quarter
taxpayer to use an alternative reporting schedule or estimate the amount of tax
due for the calendar quarter if the taxpayer demonstrates the need for such
deviation. In addition, this section also grants the commissioner the authority
to adopt a rule to allow a group of taxpayers such deviation without prior
written approval. Pursuant to this authority, the commissioner hereby grants
authority for all calendar quarter taxpayers, and
all taxpayers for the semiannual period for 2005, to make estimated
payments of their tax if done pursuant to the procedures prescribed in the
following paragraphs.
(B) A
calendar quarter taxpayer is allowed to file its commercial activity tax return
and make an estimated payment of tax due thereon
within forty days
by the
tenth day of the second month after the end of the calendar quarter if
all the procedures set forth in this rule are followed.
(1) A calendar quarter taxpayer electing to
make an estimated payment shall do all of the following for this rule to apply:
(a)
Check
File the "rule
estimation"
box on the return, report the
appropriate estimate of taxable gross receipts, and pay the appropriate amount
of estimated tax. Taxpayers seeking to use the "statutory estimation" provided
for under division (A)(2) of section
5751.051 of the Revised Code
shall
check
file that
box
return and shall not use this rule for any calendar
quarter in that entire calendar year.
(b) Make an estimated payment of the tax
using the tax rate in effect for the calendar quarter for which the estimated
payment is being made. Any minimum annual tax amount that is owed is in
addition to the estimated tax determined pursuant to this rule.
(c) On or before the due date of the return
for the following calendar quarter, the taxpayer must reconcile its actual tax
for the calendar quarter for which the estimate was made, using either a form
prescribed by the commissioner for such purpose or the actual return. The
taxpayer must calculate its actual tax using the tax rate in effect for that
quarter for which the estimated payment is made, file its reconciliation report
reconciling its actual tax with its estimated tax for that quarter, and, if
applicable, pay any underpayment of the actual tax owed for that quarter. If
the taxpayer's estimate results in an overpayment of tax, such overpayment will
be applied to the next tax return/report. If, after applying the overpayment to
such next tax return/report an overpayment remains, such remaining overpayment
may be refunded or carried forward to the subsequent return/report filed by the
taxpayer. A taxpayer making an election under this rule must file the return
for the following calendar quarter. The return for that calendar quarter may
again be estimated in accordance with this rule.
(d) In order for this rule to apply, both the
estimated payment return/report and the reconciliation report/return, along
with all applicable payments for those tax periods, must be made timely, and
the taxpayer must not have any outstanding commercial activity tax
liability.
(2) A
taxpayer electing to make an estimated payment, as prescribed by paragraph
(B)(1) of this rule,
and subject to paragraphs
(B)(3)(a) and (B)(3)(b) of this rule, must estimate its taxable gross
receipts as at least ninety-five per cent of the taxable gross receipts from
the previous quarter
, after deducting the applicable
exclusionary amount of two hundred fifty thousand dollars. However, in
no event shall a taxpayer's estimated payment for a given calendar quarter be
less than seventy per cent of its actual tax liability for that calendar
quarter. In the event a taxpayer's previous calendar quarter's taxable gross
receipts exceed its current quarter's taxable gross receipts, such taxpayer's
estimated tax liability for the quarter is only required to equal or exceed
one-hundred per cent of its tax liability for that period.
(3)
(a) For the first quarter of 2006, a
taxpayer who elects to make an estimated return and payment must estimate its
taxable gross receipts as at least forty-eight per cent of the actual taxable
gross receipts for the semiannual period of July 1, 2005 through December 31,
2005.
(b) For the first quarter returns
due for 2007, 2009 and 2011, taxpayers who elect to make an estimated return
and payment for these calendar quarters must make their estimate using at least
one hundred per cent of the actual taxable gross receipts from the previous
calendar quarter.
(C) Notwithstanding paragraph (B) of
this rule, for the semiannual period of July 1, 2005 through December 31, 2005,
any taxpayer may elect to make an estimated payment by checking the "rule
estimation" box on the semiannual report. Such taxpayer must estimate its tax
due and pay this estimated amount at the time the taxpayer files the report.
Any taxpayer who elects to estimate its tax due is then required to file a
reconciliation report along with its first quarterly return for 2006 for
calendar quarter taxpayers or with the annual fee for calendar year taxpayers,
both of which are due by May 10, 2006. Such reconciliation must reflect the
actual tax due for the semi-annual period and any additional tax due must be
paid at this time. The taxpayer's estimated payment of the tax for this
semi-annual period must be the greater of seventy-five dollars or six-tenths of
one per cent times the difference between (1) at least eighty-five per cent of
the actual taxable gross receipts for the semiannual period and (2) the five
hundred thousand dollars exclusionary amount.
(D)
(C) Any taxpayer who elects to estimate its tax using
this rule shall not estimate its tax using the statutory estimation procedure
contained in division (A)(2)(b) of section
5751.051 of the Revised Code for
any calendar quarter in that entire calendar year.
(E)
(D) Interest and
penalties will not be imposed on payments made pursuant to this rule provided
the taxpayer fully complies with this rule. In other words, such payments will
be considered to be made timely. A taxpayer who elects to estimate its tax
under this rule agrees to have any overpayment automatically be applied to the
taxpayer's next commercial activity tax report filed.
(F)
(E)
Except as provided for in paragraph (C) of this
rule, a
A calendar year taxpayer may not
use this rule.
(G)
(F) For example, assume a taxpayer for the second
calendar quarter of
2006
2020 elects to make an estimated payment pursuant to
this rule. For this example, the taxpayer's actual taxable gross receipts for
the first calendar quarter
after its applicable
exclusion were eight million dollars.
On
By August
9
10,
2006
2020, the
taxpayer files its second calendar quarter return and
checks
selects
the "rule estimation"
box
return. In making the estimated payment, the taxpayer
calculates an estimated liability
after its $250,000
exclusion of
$7,644 [.00104 * ($7,600,000 -
$250,000)]
nineteen thousand seven hundred
sixty (.0026*$7,600,000). In order to be covered by the safe harbor, the
taxpayer makes an electronic payment of
$7,644
nineteen thousand
seven hundred sixty. Such taxpayer meets the ninety-five per cent
threshold required to avoid the imposition of interest and penalties when it
reconciles its report at the beginning of the third calendar quarter.
When reconciling the second calendar quarter return by filing
its third quarter return, the taxpayer determines its actual taxable gross
receipts for the second quarter were eight million five hundred million
dollars. The taxpayer applies the effective tax rate for the second quarter to
its actual taxable gross receipts, net of its
$250,000 exclusion, resulting in a tax liability of
$8,580 [.00104 * ($8,500,000 -
$250,000)]
twenty-two thousand one hundred
dollars (.0026*$8,500,000).
On
By November 9
10, 2006
2020, the taxpayer will be required to electronically
file its reconciliation report, reflecting an additional
$936
two thousand
three hundred forty dollars tax due ($8,580
twenty-two thounsand
one hundred dollars actual tax liability for the second calendar quarter,
less the 7,644
nineteen thousand seven hundred sixty dollars
estimated payment). At the same time, the taxpayer must timely file its third
calendar quarter return/report and may elect to make an estimated payment for
the third quarter (based on the taxpayer's second calendar quarter actual
taxable gross receipts).
