OHIO HOUSE BILL 601, AS INTRODUCED, PROPOSED REVISIONS TO MUNICIPAL INCOME TAX
PROPOSED HOUSE BILL OVERVIEW
Sidney has a NEGATIVE revenue impact of about $95,000.
Other cities who do not permit a net operating loss (NOL) carryforward will see a more severe impact on revenues. (proposed 5 year NOL)
Circumvents local control
Challenges Home Rule Authority
POSITIVE IMPACT ON TAX REVENUE
Broaden definition of taxable gambling winnings. Sweepstakes, gambling, sports winnings, games of chance, prizes & awards would be taxable net any related deductions
Approximately $3,600 (gross winnings)
Employee business expenses (reported on Form 2106) would no longer be an allowable deduction
Average of $11,000
Increase minimum tax due and refund amount to $5.00
Revenue neutral
NEGATIVE IMPACT ON TAX REVENUE
Proposed “20 day rule” verses the current “12 day rule”
Approximately $86,000
Interest rate at Ohio annual certified interest rate
Calculated roughly $15,000
Late filing penalty for individuals is $25
Nearly $1,200
Late payment penalty for maxed at 10% of tax due
Possibly $6,100
IMPACT ON PROCEDURES
Semimonthly withholding reporting for employers > $11,999 per year
Federal extensions not required at original due date of return.
Governor appointed municipal tax policy board
7 members Create forms, reports, schedules and attachments required
HB 601 SUMMARY
HB 601 is complicated and confusing piece of legislation
Not revenue neutral Indicates loss of about $95,000 per year
Loss of local control (“Home Rule”)
Other cities have adopted resolutions of opposition
QUESTIONS!