Centralized filing update: myths persist

Written on Jan 25, 2018

OSCPA staff report

Ohio’s new, optional municipal tax filing and collection system is open for business; however, some misconceptions persist about the net profits tax program.

“Under the system run by the Ohio Department of Taxation, businesses can file for all of their cities at one time and arrange payment to all in one transaction through the Ohio Business Gateway,” said Barb Benton, CAE, OSCPA's vice president of government relations. “And no more rekeying information – you will soon be able to upload forms your software has populated.” Of particular note to many is what happens after you opt in:  no more notices from the numerous cities you do business in.  ODT will be the administrator for all of the city estimated net profits tax payments and returns, meaning only ODT will be dealing with refunds, appeals, audits and the like.  While ODT is providing for cities to view relevant filings and make requests to address problems they believe exist, cities should not contact you directly about your net profits taxes – any communication will come from the state.”

It’s important to note that enrolling taxpayers must register with the Ohio Department of Taxation and notify each municipality of their choice to opt-in. The municipalities will then have to share any relevant tax credit or NOL carryforward information with ODT since the state will take over administration. Centralized filing impacts only the net profits tax businesses pay. You will still file directly with cities for any payroll withholding or individual tax obligations. Also, sole practitioners and disregarded entities such as single member LLCs must continue to file directly with municipalities.

The taxpayer must take these steps by the first day of the third month of the taxpayer’s taxable year. For example, for calendar year filers that date is March 1, creating more urgency for those businesses to take full advantage of the system for making quarterly estimated payments in 2018 and filing their annual return in 2019. New businesses need only register with ODT. The election is binding for one tax year, but automatically renews year to year unless an electing taxpayer terminates the election.

OSCPA members should urge those who would benefit to register now on ODT’s website to opt in for centralized filing and payment. After registering, businesses must also notify each municipal corporation in which the taxpayer conducted business during the previous taxable year by sending Form MNP MN to each municipality, unless the taxpayer is a new business.

OSCPA Tax Policy Director Greg Saul, Esq., CAE, has written answers to some common questions about the program on this page. You can also find more FAQs here: https://www.tax.ohio.gov/MunicipalTax/FAQ.aspx. And be sure to bookmark our municipal tax reform webpage where you can find important resources and the latest updates on centralized filing.

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