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Society pivots to clarify muni net profits tax deadlines

Written on May 1, 2020
By Greg Saul, Esq., CAE, OSCPA tax policy director 

As promised in the Ohio Department of Taxation’s March 27 release extending income tax filing and payment deadlines, the Department issued additional guidance this week on Ohio’s Coronavirus Tax Relief

With the federal and state filing and payment deadline extensions secured, The Ohio Society of CPAs’ attention has now turned to municipal income tax and R.C. 718.05. For individuals, the municipal income tax due dates are clearly tied to the state filing deadline under 718.05(G)(1)(a). 

For the net profits tax, H.B. 197 last week only addressed the state-administered municipal net profits under 718.85 because ODT needed authorization from the legislature to extend those deadlines to July 15. The Department administers the municipal net profit tax only for those taxpayers that have opted in for state administration of the tax, and ODT only addressed this portion in its FAQs

Presumably for the non-state-administered municipal net profits tax, there was no need for the General Assembly to address 718.05 in H.B. 197 because the power to extend municipal filing and payment deadlines already existed. Because the Ohio Tax Commissioner extended the state deadlines pursuant to R.C. 5747.08, the provision contained in 718.05(G)(3) of the municipal income tax code has been triggered and the argument is that the net profits tax deadlines should also be automatically extended. 

Because not all the cities share this view, several groups representing municipalities have come out with their own extension announcements this week. The Ohio Municipal League sent out a member alert thanking the municipal corporations who have already made the deadline changes consistent with the state, and encouraged others to take swift action in “this time of uncertainty, providing quick information, and consistent and fair treatment is critical to all Ohio residents and businesses.” 

The Regional Income Tax Agency (RITA) announced the July 15 “extended filing and payment dates apply to individual taxpayer filings and payments as well as business net profit filings and payments, but do not apply to employer withholding.” Also, the Central Collection Agency (CCA), which includes Cleveland, issued the following statement: “The filing and payment due date for individuals and calendar year net profit filers for tax year 2019 has been extended to July 15, 2020.” Both agencies additionally said estimated payments for the first and second quarters of tax year 2020 have also been extended to July 15, 2020. 

The following cities have also recently announced filing and payment deadline extensions: ColumbusCincinnatiDayton, and Akron. The Ohio Society of CPAs will continue to push for these local extensions.If you know of a municipality that is NOT planning to offer extensions to July 15, or at least waive late fees and penalties & interest, please leave the name in the comments below or contact OSCPA directly.

RELATED: Here’s a chart of Ohio’s income tax deadlines and essential services status, along with our five neighboring states (PDF).