CPA: Centralized collection is a sensible step

Written on May 25, 2017

OSCPA staff report

Discussions over Ohio’s biennial budget are headed in the right direction, but lawmakers need to move forward with a proposal to centralize the collection of municipal net profits taxes.

That was the testimony this week of OSCPA member Lee Beall, CPA, before the Ohio Senate Finance General Government and Agency Review Subcommittee.

Beall pointed out that the bill applies only to what the Ohio Department of Taxation has estimated to be 14% of total municipal income tax collections.

“The typical municipality would retain control of 86% of its revenue, usually derived from employee withholding,” he said.

He also spoke in favor of a compromise proposal not currently in the bill that would give businesses the option to file via the Ohio Business Gateway, thus allowing them to file on a single form via commercial software they already use and pay all cities in a single transaction. The Ohio Department of Taxation would administer the net profits.

“Per the Ohio Municipal League in comments before the House, 87% of Ohio businesses currently file in three or fewer cities,” Beall said. “Having this OBG/ODT ‘opt in’ will provide meaningful relief to the remaining 13% of businesses, many of which file in dozens – even hundreds - of cities.”

Beall said OSCPA supports tax provisions in the House-passed version of the bill, namely:

  • The consolidation of Ohio’s income tax brackets from nine to seven.
  • Keeping the sales tax at its current rate and base.
  • Keeping the commercial activity tax at a single rate of 0.26% with a broad base.

Beall is an executive vice president and board chair at Rea & Associates Inc., and a member of the Ohio Tax Reform Task Force. He told legislators that the task force’s white paper issued about a year ago, “Improving Ohio’s Tax Climate” remains a solid blueprint for improving Ohio’s business climate. Read his testimony in its entirety.

Remember: lawmakers need to hear from CPAs on the need to strengthen the House-passed language for optional centralized collection of net profits tax. You can easily help make a meaningful impact by leaving a phone message with your state senator or sending a letter or email. OSCPA’s government relations team can help you do that.

2 comments

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  1. ghunt@ohio-cpa.com | May 26, 2017

    Every comment we have received so far with an opposing view on this issue remains published on our website. Some recent examples:

  2. Village council member and CPA | May 25, 2017

    Since when do we only allow comments from advocates for centralized collections.  We have not seen published comments from those individuals and municipalities that are opposed to this proposal.

    You talk about the lack of transparency and open dialogue.  That is what our democracy was based upon, and the OSCPA seems to want to ignore this premise.

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