Ohio House Ways and Means Considers Substantially Watered-Down Municipal Income Tax Reform

This year, the Ohio House Ways and Means Committee has the opportunity to consider changes to their municipal income tax code, which is the most complex local income tax structure in the United States. Ohio problematically allows over 600 municipalities to define tax bases and set their own rules for collection, auditing, and income calculation. This creates substantial compliance burdens associated with income tax filing, withholding, and accounting which are especially prevalent in industries where employees travel between municipalities in the course of their duties. One bill, HB5, represents a start at addressing some of the state’s municipal income tax practices. In recent days, a substitute bill (LSC 130 1581-2) has been introduced that substantially alters many of the provisions of HB5, keeping just a few positive aspects and changing many provisions for the worse.

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