Everything you need to know about House Bill 5: Updates, Net-Operating Loss Carry Forward, and how to put it to bed before 2015

For nearly four years, Ohio’s businesses and taxpayers have waited for common sense reforms to improve one of the most complicated and burdensome municipal income tax systems in the country. At last, it seems that great strides will be made through a reform bill, House Bill 5, that is currently being debated in the Senate Ways and Means committee.

Yesterday, represented by the Ohio Municipal Tax reform Coalition comprised of over thirty organizations including the Ohio Chamber, NFIB Ohio, the Ohio Contractors Association, and the Associated General Contractors of Ohio, former tax commissioner Tom Zaino testified in favor of House Bill 5 and put special emphasis on the greatest sticking point for opponents of HB 5: Net-Operating Loss (NOL) Carry Forward. The bill calls for a uniform five-year NOL carry forward period, which over half of the municipalities in Ohio already have. House Bill 5 also has a long phase-in period so that the full impact of the change will not hit municipalities until 2022.

The Coalition has worked diligently to develop compromises that address municipality concerns. While it is possible that municipalities could lose revenue, it is highly likely that uniform definitions, deadlines, and forms will allow businesses to fully comply with municipal tax codes, increasing revenue for municipalities.

The facts are these: Ohio’s businesses want to be good corporate citizens and comply with municipal tax codes, but due to the nearly 600 different municipalities with their own unique rules and definitions, it is unnecessarily difficult. This system hurts Ohio businesses’ productivity and competitiveness and Ohio’s ability to retain and attract new businesses. As the Columbus Dispatch argued, “some pain” is necessary for “more gain” to remedy this nightmarish system.

By appealing to your state senators and urging them to vote yes for House Bill 5: Municipal Tax Reform and Uniformity, Ohio employers and employees can at last shed the absurdity of 600 unique municipal tax codes.

 

Contact your State Senator today and urge them to vote yes on House Bill 5!

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