Hearings Continue for Legislation Aiming to Limit Tax Penalties

COLUMBUS – The House Ways and Means Committee heard proponent testimony earlier this week on House Bill 105, legislation that would place limits on municipal income tax late filing penalties, announced State Rep. Jim Thomas (R-Jackson Twp.).

“I was first made aware of this issue by an Ohioan who was being charged late fees for not filing their municipal taxes, even though they didn’t owe the municipality anything,” Thomas said. “Under current law, taxpayers can be charged up to $150 in municipal income tax penalties. This fee does not account for the actual amount of tax owed, it only penalizes taxpayers for not filing, even if they owe little to no tax.”

House Bill 105 would place a flat fee on late filing penalties of $25 for each failure to timely file each return, regardless of the liability.

The legislation would also cut down on the burdensome late return notices from a municipal tax administrator or commissioner. Currently, municipalities or the Ohio Department of Taxation may send notice to a taxpayer regarding a late return even if the taxpayer has already filed for an extension. House Bill 105 would prohibit a municipal tax administrator or Tax Commissioner from sending any inquiry or notice regarding the return until after the taxpayer files the return, or the extended due date passes.

“When taxpayers receive notice of a late return after filing for an extension, it can create unnecessary confusion,” Thomas said. “By making this change and putting a cap on late fees, we are protecting Ohioans and their families.”

The proposed legislation will continue to have hearings in the House Ways and Means Committee.