Ohio Municipal League Legislative Bulletin
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September 25 , 2014
DEPARTMENT OF TAXATION NOTIFICATION CONFUSES MUNICIPALITIES
Earlier this week, the Department of Taxation sent to municipal Auditors, Finance Directors, Treasurers and Township Fiscal Officers a directive from the Tax Analysis Division requesting municipalities provide enhanced taxpayer revenue breakdowns. This contact from Columbus has some of our members puzzled.
The communication, which a copy can be found HERE, cites the statutorily authorized annual survey the Department of Taxation conducts on Ohio cities and villages to collect data pertaining to municipal income, lodging and admissions taxes, for their annual report. What caught our attention and the attention of the nearly 600 municipalities that received the directive is the part of the letter that references sub.HB5, the municipal income tax reform bill. As our members will remember, the legislation has received two hearings in the Senate Finance Committee, and remains in that committee for further action once the General Assembly returns in mid November for the Lame Duck session.
The passage reads, “In accordance with Substitute House Bill 5, we’ve expanded this data collection to determine the breakdown between revenues generated by business and by individual or personal income. In addition, we’ve asked for clarification on joint economic development distributions. Specifically, the exact name of the agreement, with whom it is contracted with and the distribution amounts for each. “
Sub. HB5 has not been passed and enacted by the Ohio General Assembly so we are a bit puzzled by the “in accordance” directive by Ohio’s State Tax Commissioner to compel Ohio cities and villages to provide this enhanced data collection information. Furthermore, there is no legislative language in the current version of sub.HB5 that would require municipalities to collect this information and provide it to the Ohio Department of Taxation.
We just want to make sure our members are aware of this issue and are familiar with the facts.
SUB.HB5 TECHNICAL ISSUES ADDRESSED
On Monday, a meeting was convened by Chairman Oelslager and Senator Peterson with representatives from municipalities along with tax reform coalition members to discuss areas of sub.HB5 that have been identified as strictly technical issues and discrepancies in the as passed by the House version of the bill.
In addition to the representatives from municipalities and the reform coalition, those present for the review included a representative from Governor Kasich’s office, the Department of Taxation, the Senate Majority Caucus and Legislative Service Commission (LSC). The real purpose of the meeting was to go over the strictly technical errors that require corrective language and present the alternative, technical language to the LSC staff attorney who will be responsible for drafting the appropriate alternative language for the Senate to consider amending to the bill.
As part of the meeting, the significant policy issues which remain the focus of municipality’s opposition towards sub.HB5, currently before the Senate Finance committee, were not addressed. There was no discussion of when a future meeting would occur before the legislature returns to legislative activity in November, to discuss these serious and potentially financially devastating “reforms” to Ohio’s municipal income tax.