jump to navigation

A Much Needed Change | Tax Tip of the Week | No. 163 September 12, 2012

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , trackback

Ohio Municipal Tax Update

Hearings began a couple of months ago to find a way to simplify Ohio’s city income tax laws. 

Ohio is one of only 10 states where municipalities assess and collect an individual and business income tax.  All 10 states except Ohio and Pennsylvania have 22 or fewer cities assessing a municipal income tax, compared to almost 600 in Ohio.  To make matters more difficult, only Ohio allows each city to set their own definitions of income and other regulations.

The Ohio Society of CPAs has been a leading advocate to get Ohio lawmakers to address the need for municipal income tax reform.  The following is some of the testimony they recently presented: 

“The problem is that Ohio’s strong home-rule orientation allows communities not only to set their own income-tax rates, which is an appropriate accommodation to differing local circumstances, but also to establish policies such as what constitutes business income and residency.” 

“It’s easy to see the paperwork nightmare this presents to a business with operations in more than one Ohio municipality: They can spend a fortune in time trying to sort out how many hours their employees worked in various communities, then applying each community’s unique tax code to those hours.”

Just this week, our firm had to prepare 49 city tax returns for one of our small business clients that deliver services throughout the area!

To learn more about the efforts to streamline Ohio’s municipal income taxes and to keep up with developments click here.

We will keep you posted on this much needed tax reform.

As always, give us a call with any questions you may have.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

Tax Tip of the Week Video Series:


…until next week.


1. Shanon Potts - September 12, 2012

Today’s tax tip was timely given that the tax climate in other counties similar to Montgomery was one of at least 5 areas local university researchers studied amongst 9 “winning counties” across the nation. The nine counties were presented during MCOFuture #4 at Sinclair last night. Unfortunately, there must not have been many CPAs in the crowd because there was virtually no discussion on the tax climate column. You should consider sharing the Tax Tip of the Week at MCOFuture.com, tweet it to @MCOFuture and/or post it on the facebook wall. I would also be curious to know your thoughts on the researchers’ findings, particularly relating to tax climate.


2. bradstreetblogger - September 18, 2012

Hi Shanon,

Thank you for your comment, this is the first I am hearing about the MCOFuture event at Sinclair. I just finished reading through the tax climate section of the study, very interesting! I will definitely post the Tax Tip info on MCOFuture’s wall, thank you for the idea! Our firm works with individuals & businesses who are new to Ohio on a regular basis, and I will say there is always a look of confusion when I am explaining the municipal taxing structure. No pun intended, but from a compliance stand point it can be very “taxing” to businesses & individuals!

Thank you,
Lance Bradstreet