Cities escalate centralized collection lawsuit threat

Written on Oct 12, 2017

OSCPA staff report

We’ve told you how some Ohio cities are considering suing the State of Ohio over a plan to enact optional centralized collection of municipal net profits taxes. That conversation continued this week with at least a pair of news stories on the topic.

The Municipal Tax Reform Coalition, comprised of 30 business associations and collectively representing several hundred thousand employers and professionals in Ohio, pushed for the policy during H.B. 49 budget negotiations. For businesses that have worked for years to get this needed change enacted, the following quote caught their attention.

“This is the state looking for a problem, not a business-friendly solution,” Whitehall Mayor Kim Maggard told the Columbus Dispatch.

Indeed, dozens of business owners from around the state traveled to Columbus to ask legislators to pass that very solution. Not only did businesses ask for this budget bill, but businesses have been asking for relief from Ohio’s broken municipal tax system long before that.

Ohio Tax Commissioner Joe Testa said though he understands their anxiety, municipalities will find the move will help them in the long run.

“First of all, we recognized the (cities’) questions and issues that they brought forward,” before the budget bill passed, said Testa. “We made compromises in the process to make it more palatable for them.”

Testa joined us on the latest episode of OSCPA Spotlight and said ultimately the benefit to businesses will help cities grow employment.

“If we can figure out ways we can leverage the resources of the Department of Taxation, that's good news,” he said. “And because of the economies of scale, because of the reach and the bandwidth of the Department of Taxation, we're going to have better compliance.”

He said the key now is for cities to help ODT with implementation of the optional collection.

“Ultimately, we're serving the taxpayers and citizens of the state,” he said. “We owe it to them to work to make this as useful, seamless and effective as it possibly can be.”

You can hear more from Testa in this episode.


Optional centralized collection – a look back

Optional centralized collection – a cooperative effort


Leave a comment
  1. Greg Saul | Oct 25, 2017

    OSCPA surveyed its entire membership on municipal income tax issues in 2012 and below are the results concerning centralized collection:

    • 62% think  centralized collection of municipal income tax would benefit Ohio’s business climate.
    • 79% of respondents think it would be beneficial to change the collection structure to something other than the current system. 
  2. CPA & Works for a City | Oct 23, 2017
    Ohio Society of CPA forgets that many of its members work in many areas other than tax prep and auditing.  Why hasn't the OSCPA reached out to its members to find out what they think about topics instead of telling us what our views should be?  So many legislative fixes are just Band-Aids on top of other Band-Aids that end up causing more problems than solutions in the end.  
  3. ghunt | Oct 16, 2017
  4. CPA and Mayor | Oct 15, 2017

    "Some Ohio Cities" The number is close to 200 and growing. Several R State Senators are backing away from this saying they voted for the budget but oppose centralized collection. We have also heard nothing about any improvements to the OBG since the bill was passed.

    It will soon be apparent to the legislature that the OSCPA lobbyists are the problem and not the solution. This would be unfortunate for our members.



  5. Member | Oct 13, 2017
    This article is more of an opinion/persuasive piece than it is news.  It seems the Society isn't concerned with its many members that may actually be against this bill.  I'm sure they'll start caring again when they send their next PAC mailer begging for money so that they can lobby.
  6. Council member | Oct 13, 2017

    As a member of council of one of the municipalities that is a party to the suit, when will the Society understand that the municipal tax revenue pays for the critical services that the municipalities provide.  If the Department of Taxation is going to collect the tax revenue and not let the cities know what has been filed and deduct their fee, how much money will not go to the correct tax district?

    Has anyone from the Society spoken with their respective municipal leaders to find out how much money will be lost to his/her city of residence?  One of the cities participating in this action is Dublin where the Ohio Society of CPA's has its office.


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