COLUMBUS – State Representative Al Cutrona (R-Canfield) introduced legislation today that will create a Tax Fraud Study Commission.
“It is vitally important that we work to prevent Tax Fraud from occurring and this Study commission will help to provide answers for the fraud occurring in our state,” said Cutrona.
Unfortunately, some Ohio employers have been taking advantage of an income tax loophole by classifying workers as employees or independent contractors.
In 2009, the Attorney General’s office released a report on the Economic Impact of Misclassified Workers for State and Local Governments in Ohio. It was estimated that 459,000 workers were misclassified. This meant unemployment insurances losses to Ohio workers of nearly $35 million. For the state of Ohio, this meant foregone state income tax revenues between $112 million and $223 million annually and a loss of more than $510 million in Bureau of Workers’ Compensation (BWC) premiums annually. These numbers have likely only increased since the report’s release.
In addition to misclassification, some have been evading taxes by paying workers under the table.
The commission created by this legislation would have thirteen months to investigate these issues and present their findings to the Governor and Ohio Legislature.
The commission will consist of eight members, three members of the Ohio Senate, three members of the Ohio House of Representatives, and two members of the public, one representing a labor organization and the other representing the contractors association.