If you’re tired of spending countless hours and money on getting your local taxes in order, then relief may be on its way. The Ohio House of Representatives recently passed the state’s municipal income tax reform bill (Sub House Bill 5), which seeks to standardize and create more efficiency for Ohio’s patchwork municipal tax system.
The way the current system is structured creates complexities, and in some cases confusion, when it comes to filing municipal income tax returns. Some complications of the current system include:
- The fact that different municipalities define taxable income differently
- Some municipalities tax individuals who live within their municipal limits and other municipalities tax those who work within their limits
- Many municipalities have different definitions of “nexus” – the minimum connection that taxpayers need to have to a jurisdiction to be subject to its laws
Benefits To Ohio Municipal Tax Reform
The benefits to municipal tax reform in Ohio are plentiful. A few of these benefits include:
- Promotes economic development through creating a more competitive tax environment
- Significantly reduces the financial burden on taxpayers when preparing tax returns
- Simplifies employee tax withholding for small business owners
Ohio Municipal Tax Reform – What You Can Do
With the Ohio House’s passing of this bill, it’s now up to the Ohio Senate (most likely its Ways and Means Committee) to decide the future of municipal tax reform. If you believe in the need for income tax uniformity among Ohio’s municipalities, contact your respective Ohio State Senator, and encourage them to pay attention to and support this important piece of Ohio legislation.
Municipal Tax Reform Help
If you’re not sure how municipal tax reform will directly impact you or you’d like to have a better understanding of it, contact Rea & Associates. Our team of Ohio tax professionals can walk you through the issue and explain how this reform can improve the income tax return process for you in the long-run.
Author: Tracy Kaufman, CPA, Principal (Columbus office)