OSCPA joins court brief to defend recent muni tax victories

OSCPA staff report

As two cases wind their way through the 10th District Court of Appeals, The Ohio Society of CPAs recently joined other business groups in filing an amicus brief explaining the need for the centralized collection and administration of the municipal net profits tax.

The brief was filed May 30 by OSCPA along with the following: Ohio Chamber of Commerce, National Federation of Independent Business in Ohio, Ohio Realtors, Manufacturing Policy Alliance, Associated General Contractors of Ohio, Ohio Contractors Association, National Electrical Contractors Association, and Mechanical Contractors Association of Ohio.

The brief detailed the municipal tax compliance requirements businesses faced before the enactment of H.B. 5 (130th GA) and H.B. 49 (132nd GA) and explained the need for the reforms those bills brought.

The Ohio Department of Taxation has estimated the reforms would save businesses $800 million annually in compliance costs.

“… The net profit portion of the municipal tax raises approximately $750 million of annual revenue,” the business groups wrote in the brief. “That means that the overall compliance costs incurred by net profit taxpayers exceeds the amount of actual tax due.”

“When the cost of compliance is nearly equal to or exceeds the actual amount of tax due, the tax system is overly burdensome and abusive, and limitations are properly imposed by the General Assembly.”

Cities appealed the two cases after a Franklin County Common Pleas Court ruled Feb. 21 that the Ohio Constitution clearly allows such reforms at the state level.

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