State Representative Demetriou Introduces New Bill to Revise Ohio Income Tax Laws

State Representative Steve Demetriou (R-Bainbridge Twp.) today announced that he introduced a new piece of legislation that would remove the five-year limit on municipal income tax net operating loss carryforwards.

“Ohio’s current five-year limit on municipal net operating loss carryforwards can penalize businesses that experience economic downturns or uneven revenue cycles,” said Representative Demetriou. “This is a commonsense update that reflects how businesses actually operate. Aligning municipal income tax law with federal standards helps ensure Ohio remains competitive, predictable, and fair for job creators across the state.”

Under current Ohio law, there is a standardized 5-year limit for municipal income taxes, requiring all municipalities to allow a 5-year carryforward period for net operating losses incurred in the tax year. If passed, this bill would eliminate the state-imposed time limit, bringing Ohio municipal income tax policy into closer alignment with the federal tax treatment of business losses.

This bill awaits a number and committee assignment.