Centralized filing update: The latest features for taxpayers who have opted in

Written on Dec 21, 2018

By Molly Ryan Kowaleski, OSCPA PR & Engagement Manager

For years, OSCPA has worked to bring meaningful reform to the most complicated municipal tax structure in the nation. In June 2017, Gov. John Kasich signed HB 49 into law, enacting a number of positive reforms for Ohio businesses, including the centralized collection of municipal net profit tax through the Ohio Department of Taxation.

“We had a majority of our clients opt in for the centralized collection and one of the benefits of that is that when we went to pay their local tax estimates, we could pay all four quarters at once,” said Megan Durst, partner at McLain, Hill, Rugg and Associates CPAs, “either all at once or we could schedule them for the future, so they still only have to think about it one time.”

This was one of the key benefits of centralized filing for Durst. When it went into effect earlier this year, she was excited to see it, along with the impending Modernized eFile (MeF) integration within her firm’s tax preparation software.

For taxpayers and practitioners who opted to file their 2018 municipal net profit tax return with ODT, there are now six software vendors that intend to include a Modernized e-File (MeF) option in their 2018 tax preparation packages. They include CCH Incorporated (CCH ProSystem fx), Corptax, Inc. (Corptax), Drake Software (Drake Tax), Tax Technologies, Inc. (Tax Series) and Thomson Reuters (GoSystem/OneSource and UltraTax CS).

“Our software is a great resource in helping us prepare these returns, so it’s nice they are going to incorporate it all together,” said Durst, who uses the UltraTax program.

For users who have opted in but do not have one of the software vendors above, representatives from the Ohio Department of Taxation noted that users can upload attachments directly in the Ohio Business Gateway.

Another key component of the new system is the Municipality/Local Government Portal, which allows municipalities to upload files, check on the status of returns and securely share taxpayer information with ODT.

“We’re developing a local government portal to exchange information with the municipalities,” said Sarah O’Leary, Esq., tax program executive in the Business, Excise & Energy Tax Divisions at the Ohio Department of Taxation. “We went live with the first phase in November, which allows municipalities to access reports directly. Previously, we mailed hard copies of those; now they can still access PDF reports, but can also export and filter their own data directly in the portal.”

Businesses may continue to register for centralized collection of municipal net profits taxes, a reform that could save all businesses collectively up to $800 million per year in compliance costs, according to ODT. Taxpayers who operate on a calendar year basis are required to opt in to file on or before March 1, 2019 for taxable year 2019.

“This is a new system so, of course, with anything new, you have a learning curve, but [OBG] has been easy,” said Durst, “especially for the client that I have that files 160 city returns – that’s 160 estimated tax payments and 160 paper returns they’ve been filing with different cities. But, next year, we’ll be able to file one return and e-file it directly in our tax software. We’re looking forward to that.”

ODT echoed that sentiment.

“We have received positive feedback and the estimated payments and declarations that have been live since March seem to be going pretty smoothly,” O’Leary said. “We do have a few changes we’re working on now to accommodate additional user feedback.”

Durst added: “I’m interested to see how this first filing season goes and how we can make it even more business-friendly in the future. I’m sure as more people get involved, they’ll have different thoughts on how to improve it.”

Related:

Muni tax ruling a victory for Ohio business owners

Centralized filing update: myths persist

Focus on ‘levy’ definition, home rule in muni tax case

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