State Representative Rob McColley (R-Napoleon) voted for legislation that exempts municipal gas companies from collecting and remitting sales taxes on the natural gas they provide to customers.

House Bill 390 came in response to a recent situation in which the Ohio Department of Taxation contacted cities with municipal gas departments and informed them that they must begin collecting sales tax from residents with natural gas accounts. Prior to this, municipal gas departments were not subject to sales tax. HB 390 specifically exempts municipal gas departments from sales tax.

“I was happy to support this common-sense legislation that ensures parity between city owned natural gas providers and all other city owned utility providers,” McColley said. “Particularly, I am happy to do this because the tax enforcement affected the Village of Deshler and its residents.”

Because the state had insisted on collecting back taxes for the past three years, the legislation would also save these cities as much as $8 million in taxes in 2016 and nearly $3 million in the years that follow, costs that would ultimately be borne by the customers.

The legislation, sponsored by Reps. Tim Schaffer (R-Lancaster) and Wes Retherford (R-Hamilton), mostly impacts the select municipalities that still operate their own utilities: Lancaster, Hamilton, McComb, Deshler, Oakwood, Verona and Williamsport. But the bill also addresses the concerns that failing to address this situation now could lead to a slippery slope.

The legislation now heads to the Ohio Senate for further consideration.

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