This week and last, proponents of House Bill 5 testified before the Senate Ways and Means Committee, including several Ohio Chamber members. John Swanson, Executive Vice President and CFO of Echoing Hills Village Inc., and Tammy Schrock, President of Eagle Heating and Cooling, Inc. shared their perspectives about the cumbersome municipal tax system in Ohio and why HB 5 will reduce the compliance burden.

Swanson hit on three areas of municipal tax reform that would help not only Echoing Hills, but many Ohio businesses. First, he described the difficulty of tracking movement of employees who work in multiple municipalities. This, coupled with his second point about the current system’s lack of explanation about what constitutes a “day,” has led Echoing Hills to pay thousands of dollars each year updating payroll software to try to track employees’ hours and comply with cities.

Sharing Swanson’s final point, Schrock testified about the need for uniformity because of the trouble ascertaining the different rules, forms, and deadlines each city imposes. In order to mitigate the expense of tracking and hiring outside help to ensure compliance, Schrock shared that she actually turns down jobs to stay out of too many municipalities. Despite that concern, in 2012 she had to file 95 separate tax forms and 104 in 2013.

The testimony of other member businesses from trade associations in the Municipal Tax Reform Coalition also echoed the themes in Swanson’s and Schrock’s testimonies: Since Ohio’s municipal tax  system discourages employers from accepting work and puts an undue burden on employers and employees to comply, it is not good for businesses or their employees. Furthermore, a system where businesses have to cross their fingers and hope they have done their due diligence to comply, even with the assistance of a CPA or an accounting firm, is a broken system that Ohio’s General Assembly needs to rectify.

The bottom line is simple: the current municipal income tax system damages Ohio’s economic competitiveness and Ohio businesses’ ability to grow and compete. House Bill 5 goes a long way toward addressing these issues.

A vote on HB 5 is expected the first week of December. Contact your Senator today to urge them to vote yes on HB 5.