This fall, the Ohio senate is scheduled to consider House Bill 5 (HB5), which is reform legislation that will overhaul Ohio’s dysfunctional municipal tax system.
Currently there are nearly 600 taxing municipalities in Ohio and each one is able to define income that is subject to tax. Each municipality is also free to disallow net operating losses (NOL’s) or allow them for any period ranging from 0 to 15 years. Each municipality also may individually define filing requirements, extensions, due dates, penalties, and the appeals process.
Ohio currently has the most complicated local tax system of any state that assesses local income tax on businesses and individuals. HB5 will create a uniform set of rules under which municipalities would assess income tax. It extends the occasional entry rule from 12 to 20 days and does not require look-back withholding once the 20 day limit is reached. Withholding would only be required for wages paid as of day 21.Read More