State Representatives Mike Henne (R-Clayton) and Cheryl Grossman (R-Grove City) today offered sponsor testimony before the House Ways and Means Committee in support of House Bill 5, legislation that strives to make Ohio’s municipal income tax system simple, fair, predictable, and more cost-effective for businesses.

Specifically, key provisions of House Bill 5 include:
• Extending occasional entry rule (requiring companies to withhold for employees not working in the principal place of business city) from the current 12 days to 20 days
• Creating uniform treatment of filing requirements
• Creating uniform net operating loss carry-forward period of five years
• Creating consistent taxation of pass-through entities
• Defining “day” to correspond with an employee paying the city where he or she spends the “preponderance of the work day”
• Defining “resident” to eliminate the requirement that someone can be a resident of an Ohio city without being a legal resident of the state of Ohio House of Representatives

“As we compete with other states and nations for creating and retaining jobs in Ohio, it is imperative that we achieve municipal income tax uniformity for cities and businesses,” said Rep. Grossman. “The current patchwork that exists, with nearly 300 different forms being utilized by nearly 600 cities, is time consuming, burdensome and expensive for employers and employees. Ohio is the most difficult state in the nation with the current lack of uniformity.”

“The current system is a nightmare for business and is driving site selectors away,” said Rep. Henne. “With uniformity, Ohio will be more competitive for new investments and jobs. Ohio needs this reform so that we can prosper.”

Currently, Ohio has the most complicated local municipal income tax system in the nation, with more than 600 different municipalities utilizing more than 300 different tax forms. This system creates a high cost of compliance for Ohio’s businesses, which hinders economic growth, discourages companies from locating in Ohio, and causes some businesses to relocate outside of Ohio. International site selectors rank Ohio’s municipal income tax system as one of the main factors discouraging location to Ohio.

House Bill 5 has received the support of numerous associations and business groups, including the Ohio Society of CPAs, Ohio Chamber of Commerce, Associated General Contractors of Ohio, National Federation of Independent Business, Associated Builders and Contractors, Ohio Home Builders Association, Ohio Manufacturers’ Association, Ohio Restaurant Association, Ohio State Medical Association, Ohio Insurance Institute, Ohio Trucking Association, Ohio Realtors Association, Ohio Contractors Association, Ohio State Bar Association, and Ohio Produce Growers & Marketers Association.

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