House Bill 5: Municipal Tax Reform and Uniformity stands to substantially improve an essential process for employers and employees—filing municipal income tax returns. This week, Ohio lawmakers came together and finally passed municipal tax reform that will create uniform definitions, forms, and deadlines for filing; give employers a twenty day safe harbor before they have to withhold to cities outside of their home base city; and permit companies to carry forward prior-year net operating losses for five years. These changes will make municipal tax compliance significantly easier on companies, especially small businesses that do not have the extra staff and resources to track their employees and file multiple tax returns.
HB 5 won significant bi-partisan support through a working relationship between the business community and lawmakers and represents a fair compromise between businesses and municipalities, despite what some may say. We are confident that employers will save money due to increased ease of compliance and that municipalities will eventually see more tax revenue as companies are able to more easily comply. This is a clear victory for Ohio businesses and all of Ohio.
Thank you to all of our advocates who contacted their legislator, testified, and/or shared our action alerts!