OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 638 Bill Analysis
135th General Assembly
Click here for H.B. 638’s Fiscal Note
Version: As Introduced
Primary Sponsor: Rep. Barhorst
Effective date:
Zachary P. Bowerman, Attorney
SUMMARY
▪ Disallows interest on county sales tax refunds.
▪ Extends the time for state recovery of amounts of refunded taxes from local subdivisions
from three to six years.
DETAILED ANALYSIS
County sales tax refunds
Under current law, when a person overpays state or local, i.e., county or transit authority,
sales or use tax, that person is entitled to a refund with statutory interest calculated from the
date of the overpayment. The bill eliminates interest on refunds of county sales and use tax, but
continues to allow interest for refunds of state and transit authority taxes.1 The change applies
to refunds allowed on and after the bill’s 90-day effective date.2
State recovery of refunded local taxes
Under continuing law, when a local government receives revenue from a tax or fee
collected by the Tax Commissioner that turns out to have been illegally or erroneously collected,
the taxpayer is entitled to a refund that is paid out of the state Tax Refund Fund. To recover the
amount of local tax refunded, the Tax Commissioner takes that amount out of the next
distribution of taxes to that local government. However, if that recovery amount is greater than
25% of the distribution, the Commissioner may spread the recovery over multiple distributions.
1 R.C. 5739.132.
2 Section 3.
November 25, 2024
Office of Research and Drafting LSC Legislative Budget Office
Under current law, this recovery period cannot exceed three years. The bill extends the recovery
period to not more than six years.3
HISTORY
Action Date
Introduced 07-02-24
ANHB0638IN-135/sb
3 R.C. 5703.052.
P a g e |2 H.B. 638
As Introduced


Statutes affected:
As Introduced: 5703.052, 5739.132