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OSCPA files arguments for centralized collection

Written on May 1, 2020

OSCPA staff report

Ohio’s archaic municipal net profits tax system costs businesses more to comply than cities make in revenue, OSCPA said in two amicus briefs filed this past week with the state Supreme Court.

The arguments, which were filed this past week in two separate cases, come as the court considers cities’ appeals challenging reforms to Ohio’s municipal income tax system.

OSCPA leads the Municipal Tax Reform Coalition, a broad partnership of statewide organizations driving reform of Ohio’s municipal income tax code. The group argues that centralized administration of the net profit portion of the municipal income tax would save taxpayers as much as $800 million per year, but the provision itself only nets cities $750 million annually.

“Based on these estimates, the overall compliance costs incurred by net profits taxpayers exceeds the actual amount of tax due, the tax system is overly burdensome and abusive, and limitations and restrictions are properly imposed by the General Assembly,” the coalition wrote.

The next step in the process – scheduling oral arguments – is likely to occur in December followed by arguments in the spring, said OSCPA Tax Policy Director Greg Saul, Esq., CAE. He said he remains confident the laws are constitutional.

Cities in May filed  an appeal that seeks to overturn an earlier appeals court ruling upholding OSCPA-supported reforms in 2014’s HB 5, and in 2017 law changes eliminating sales throwback and a centralized filing and payment option for the municipal net profits tax. The Ohio Supreme Court on Aug. 6  granted jurisdiction to hear the appeals on the cities’ assertion that the laws violate the “Home Rule” provision of Ohio’s constitution.

For more information on this important issue, contact the OSCPA government relations team.

Learn more:

Nov. 15 amicus brief (PDF)

Nov. 18 amicus brief (PDF)