One of the biggest barriers that Ohio’s business climate faces is our complicated tax system, which includes multiple layers that are difficult to navigate. A great example of this burdensome tax structure is the municipal income tax.


Ohio is the only state in the nation in which each city and village is allowed to establish its own set of rules and regulations. In other words, not only do cities and villages collect their own taxes, but they also lay out rules and guidelines specific to their municipality.


This structure places a lot of stress and costs on businesses to comply with all the tax ordinances, nearly 600 throughout the state. It is especially obstructive for businesses that have employees who work or travel in multiple cities. In some cases, compliance costs more than the tax itself.


This is money that would be put to better use if it stayed in the private sector like hiring employees or expanding services. Instead it is going towards complying with government statutes.


I have joint-sponsored legislation that would clear up Ohio’s overbearing municipal tax system. The top priority in Ohio remains job creation, and there are areas where government can make a difference. Often, however, government can be most helpful by simply getting out of the way.


House Bill 5 aims to put all municipalities under the same set of rules so that businesses are not burdened with learning multiple tax codes. Each city will be allowed to choose its own rate and administer its own collection but will use the same definition of income. Employees who work in other cities will not have to withhold municipal tax until they exceed 20 days in that city, but will continue withholding for their home city. This will help relieve compliance headaches for businesses.


As the backbone of Ohio’s economy, small businesses have a lot of responsibility. Complying with bulky, burdensome government should not be part of it.

 
 
 
  
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