Ohio’s taxpayers spend roughly $700,000 annually for state investigators to track down and, in some cases, close businesses that fail to hand over sales tax collected from customers.
The state has suspended roughly 700 Ohio businesses since 2013 because owners failed to pay sales tax.
The program, state officials say, is meant to put struggling businesses on track to pay their bills and make sure customers aren’t swindled out of money. But, it can also cause publicity nightmares for businesses.
“That money is not theirs,” said David Peck, who oversees the Ohio Department of Taxation’s compliance division. “That’s the thing with sales tax that people don’t realize. As a taxpayer, you’re paying that to the business in the good faith that they’re going to turn around pay that to the state.”
To be suspended by the state, business owners must first land themselves in Ohio’s Habitual Offenders Program, which means the business has a recent history of late sales tax payments. Currently, 1,800 businesses, most of which collect $25,000 or more a year in sales tax, are enrolled in the state’s program.