A court decision announced this week and supported by AGC of Ohio ensures that business owners across Ohio can continue to take advantage of centralized filing and payment of municipal net profits taxes. This new benefit is especially important for employers, like contractors, who file municipal returns in multiple cities and villages across Ohio. The ruling was issued in response to a lawsuit filed last fall by over 100 cities challenging that centralized filing and other municipal tax reforms were a violation of home rule authority.
Franklin County Common Pleas Court Judge David Cain on Feb. 21 ruled the Ohio Constitution “makes it clear that the general assembly has the power to pass laws that limit the power of municipalities to levy taxes.” Further, the cities “can argue the definition of the word ‘levy’ until they’re (sic) blue in the face, but using common sense, the Court can only find that the Collections deal with the levying of taxes.”
Cain also ruled there was no need to continue hearings and terminated the case. That means businesses may continue to register for centralized collection of municipal net profits taxes, a benefit the Ohio Department of Taxation has said could save up to $1.6 billion per year.
Ohio Tax Commission Joe Testa applauded the decision. “It’s an important ruling for business taxpayers in Ohio who for too long have had to deal with this costly, complex process for local tax on business income. This law gives business taxpayers the opportunity to save millions of dollars in the cost of complying with the fragmented municipal tax system.”
Employers may opt in for 2018 to file one single return and make one payment quarterly through the Ohio Business Gateway (OBG) for all cities where they owe municipal net profit taxes. The Ohio Department of Taxation will remit payments due to cities and villages monthly.
Businesses with a calendar year end must both opt in by March 1 and notify the cities they operate in no later than that date to centrally file for the 2018 tax year (make quarterly payments in 2018 and file the tax return in 2019). Opt-in now.
For more information, visit www.tax.ohio.gov; or view step by step instructions.
HELP AGC ADVOCATE FOR YOU
Contribute to AGC of Ohio Action today! Fundraising is part of the political process, and a healthy PAC is vital to AGC’s success at the Statehouse! Make checks payable to AGC of Ohio Action (non-corporate contributions only). Sole proprietors, partnerships and unincorporated associations, which include limited liability companies under Ohio campaign finance law, may use company funds to contribute; such contributions should include the name of the entity and individual making the contribution.