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Ohio House Bill 601, As introduced, proposed revisions to municipal income tax

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.

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Ohio House Bill 601, As introduced, proposed revisions to municipal income tax

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  1. Ohio House Bill 601, As introduced, proposed revisions to municipal income tax

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. QUESTIONS!

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