Implementation of municipal tax reform remains on track, meaning that businesses can continue registering to centrally file returns and pay municipal net profit taxes through the Ohio Business Gateway.
The option is good news both for Ohio taxpayers and businesses that file returns in multiple municipalities. The Ohio Department of Taxation estimates a combined savings to businesses of $800 million annually in red tape and compliance costs if all eligible businesses participate.
“The centralized collection feature is one of the best advantages Ohio taxpayers have for reducing administrative headaches this tax season,” said Barbara Benton, OSCPA’s vice president of government relations. “Ohio business owners have complained for years about the high cost of complying with our complicated municipal tax system. This is a welcome change that will help them meet filing requirements efficiently and reinvest savings to grow their businesses.”
Two groups of Ohio cities and villages filed separate civil lawsuits in late 2017 seeking to kill recent significant municipal tax reforms, however OSCPA is confident the laws are constitutional as passed.
The Franklin County Court of Common Pleas on Dec. 21 issued an agreed order giving cities additional time to reconcile their ordinances with the law. However, the court said, “all other provisions of House Bill 49, other than the Ordinance Reconciliation provisions, shall remain in full force and effect until or unless further order of this Court.”
Taxpayers should opt in now through ODT’s website to register for centralized filing of 2018 returns. To file centrally, taxpayers must register on or before the first day of the third month after the beginning of a taxpayer’s fiscal year (March 1 for calendar year businesses). The Ohio Department of Taxation will administer the program.
As the implementation process continues, the Ohio Department of Taxation also has made the final filing on the following rules related to centralized collection of municipal net profits taxes. All three are effective Jan. 12:
- Filing of returns and payments by electronic means
- Joint economic development zones and joint economic development districts
- Change in taxable year and declaration of estimated taxes for short taxable years
Contrary to some assertions, the new municipal tax laws will not reduce the amount of taxes owed. They simply make it easier for taxpayers to comply with filing in potentially hundreds of Ohio cities and villages, thereby saving significant time and money that until now was spent generating piles of paperwork.
The Ohio Society of CPAs partnered with the Kasich Administration, state legislators and the Municipal Tax Reform Coalition, representing hundreds of thousands of Ohio businesses, to pass centralized filing and other pro-business reforms aimed at fixing the most burdensome municipal tax system in the nation.