Leading Ohio business groups applaud legislators for persevering on Ohio municipal tax reform

(COLUMBUS)—House Ways and Means Chairman Peter Beck today introduced a substitute version of House Bill 5 that was the result of countless hours of testimony and interested party meetings over the past two years.

The Ohio Society of CPAs, NFIB/Ohio and Ohio Chamber of Commerce support swift passage of HB 5. These organizations are among 30 members of the Municipal Tax Reform Coalition, which represents over 350,000 employers and professionals across Ohio.

The statewide associations applaud Chairman Beck’s efforts to seek a balance between the interests of taxpayers and municipalities, and the ongoing efforts of State Representatives Cheryl Grossman and Mike Henne, joint sponsors of HB 5, to create a more competitive and uniform municipal income tax system in Ohio.

“While the legislation doesn’t remedy all of the problems with our current municipal tax system, the revised bill drafted by Chairman Beck will have a significant, positive impact on the cost of compliance for Ohio taxpayers,” said Barbara Benton, vice president of governmental affairs for The Ohio Society of CPAs.

“Ensuring greater uniformity among Ohio’s hundreds of municipal tax codes will result in a local tax system that is simpler, fairer and more predictable – all hallmarks of good tax policy,” Benton said.

Ohio is the only state where almost 600 cities dictate their own tax rules, regulations and deadlines. The result for many taxpayers is compliance costs that often exceed what they owe in taxes. This process is multiplied ten-fold for small businesses that must file in every city where they provide goods or services. 

HB 5 offers a common sense approach to fixing a complex problem that has plagued Ohio taxpayers for years. When enacted, this hard-fought legislation will establish uniform rules and regulations across Ohio, making it easier for taxpayers to understand where, how and when to file local taxes.

 “NFIB/Ohio applauds several improvements in Substitute House Bill 5,” said Chris Ferruso, legislative director for NFIB/Ohio. “Of particular importance to Ohio’s small businesses is the five-year net operating loss carry forward, which recognizes the cyclical nature of business and creates the stability of one uniform statewide treatment. 

“Additionally, the extension of the casual entrant rule to 20 days with no retroactivity, coupled with the exemption for businesses with less than $500,000 in gross receipts, should help alleviate a lot of the time-consuming paperwork and financial burden small businesses face in complying with the current system.” 

HB 5 will enable more employers to save money through simplified compliance which they can invest directly into Ohio's economy through business expansion and job creation. Subsequently, this will expand the tax base for every municipality.

“The current municipal tax structure is a barrier to attracting and retaining jobs,” said Dan Navin, assistant vice president, tax and economic policy with Ohio Chamber of Commerce. “The lack of uniformity hampers economic development and forces Ohio businesses to spend millions of dollars on compliance. The Ohio Chamber believes the new Substitute House Bill 5 will allow employers to better use these resources to invest in and grow their businesses and create jobs.”

In view of the hundreds of hours Chairman Beck and the bill sponsors have already dedicated to working on compromise legislation, the Coalition hopes for quick action by the House Ways & Means Committee. The goal is bringing this important legislation to the House floor for a full vote soon.

The Municipal Tax Reform Coalition is a broad partnership of 30 organizations representing more than 350,000 employers and professionals in Ohio working to simplify Ohio’s burdensome municipal tax system. For more information and a full list of Coalition partners visit www.MuniTaxReform.org.  Follow the Coalition on Twitter:  @OHMuniTaxReform

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