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The purpose of this informational release is to explain the changes made under the Taxpayer Services Bill, H.B. 612 (effective 9/29/2000), that allows for amounts entered on most documents filed with the Tax Commissioner to be rounded. Newly enacted R.C. 5703.055 allows taxpayers to elect to permissively round and authorizes the Tax Commissioner to require rounding. The procedures for rounding are discussed below.
Permissive Rounding
As stated above, R.C. 5703.055 explicitly permits taxpayers to round all amounts entered on any return, report, voucher or any other document filed with the Department. Please note, if the taxpayer elects to round, the taxpayer cannot selectively round some figures and not others within the same return or report.
Mandatory Rounding
R.C. 5703.055 also gives the Tax Commissioner the authority to require rounding. When rounding is required, taxpayers will be notified. Due to changes that need to be made with the tax forms and processing procedures, the implementation of mandatory rounding may take some time.
Rules for Rounding
The same rules apply for both permissive and mandatory rounding.
Examples:
Sales Tax
It is important to point out that rounding impacts only the final reporting and remitting of sales and use tax. Vendors and out-of-state sellers are still required to collect the exact amount of the tax--down to the penny--pursuant to the bracketed tax structure under R.C. 5739.025. If a vendor or out-of-state seller elects to round, they must still calculate their original gross sales, exempt sales, and taxable sales using the same exacting methodology as always; only the final figures reported on the returns filed with the Tax Commissioner are subject to rounding.
