What CPAs need to know: Advocacy in 2018

Written on Dec 21, 2017

By Gary Hunt, senior content editor

The past year saw breathtaking progress on long-sought legislative reforms, but the story of CPAs’ legislative priorities is a cliffhanger as 2017 draws to a close.

The fate of some of those measures – for now – is in the hands of the court system.

“We made some significant gains in 2017 that we now are working to protect,” said Barbara Benton, CAE, OSCPA VP of government relations. “Opponents are seeking to dismantle some of those gains with municipal income tax reform issues.”

The Ohio Legislature in June passed a state budget bill that included the option of centralized collection of municipal net profits taxes, something OSCPA has argued for years is necessary to improve the state’s arcane tax system. However, in recent weeks, cities have filed two lawsuits challenging the constitutionality of the provision.

The crux of OSCPA’s advocacy efforts in 2018 will be fighting those lawsuits, Benton said.

“This is on two fronts,” Benton said. “We, along with 29 other business organizations making up the Municipal Tax Reform Coalition, are fighting two separate lawsuits against the state in the courts. Proponents are seeking to repeal not only the option of centralized collection, but also want to reinstate sales throwback and reject many of the provisions of House Bill 5,” which was signed into law in 2014.

OSCPA’s Tax Policy Director Greg Saul, Esq., CAE, said the law should survive a challenge on constitutional grounds, a view Benton echoed.

“We are confident the courts will agree that the legislature has full authority under the Ohio Constitution to limit the mechanics of how cities tax residents and businesses,” she said.

Nevertheless, the lawsuits create uncertainty and expend local and state tax dollars and resources that could be used elsewhere. Still, OSCPA has other areas it will be concentrating on in the New Year, most notably:

  • Enacting bright-line residency legislation for state income tax purposes.
  • The passage of federal/state tax conformity legislation for the 2018 filing period.
  • Defeating legislation seeking to reinstitute the municipal sales throwback rule.
  • Defeating legislation allowing judges to assess attorney fees pre-judgement on taxpayers challenging municipal tax liabilities.
  • Implementing OSCPA’s candidate endorsement program, which will evaluate numerous races in 2018, including all Ohio statewide races.

“In the long-term, we will keep our focus on the recommendations in OSCPA’s Tax Reform Task Force report,” Saul said. “We accomplished eight of our recommendations in the first half of this General Assembly, and the goal is to keep working on the remaining areas.”

Additionally, he said it’s often the work the Society does behind the scenes that has the most impact.

“The noteworthy thing about playing defense is that the issues we prevent from happening often are equally as important as the initiatives we endorse that are passed,” Saul said. “Although you will not hear as much about it, we're always working behind the scenes to stop harmful legislation.”

He said the three components of OSCPA’s governmental relations program are lobbying, the Ohio CPA/PAC and grass roots efforts. And it’s important to note that the legislative process is usually a marathon and not a sprint. CPAs can do their part by reaching out to their own legislators with OSCPA’s message and contacting the Society when they have concerns with government.

“If you have an issue, please come forward and give us real-life examples – that’s what helps OSCPA decide on legislative priorities and allows us to better explain problems to legislators,” Saul said.

View the complete list of OSCPA 2018 legislative, regulatory and judicial priorities.

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