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Posted on: April 26, 2017

HOUSE SUB BUDGET BILL REMOVES CENTRALIZED COLLECTION OF MUNICIPAL NET PROFIT TAX PROPOSAL

The League would like to alert our members that the House Finance Committee approved new language for a Substitute Budget Bill that removed the Governor's proposed centralized collection language and focuses instead on properly funding the OBG for a rebuild that will adequately service the needs of the tax filers that choose to use the central portal while preserving local control of municipal revenue.

The League would like to thank Rep. Gary Scherer (R-Circleville) who has been working with the League to address our members concerns and ultimately offered the amendment language adopted by the Finance Committee. A copy of the budget language can be found HERE.

The language will:

  • Appropriate $24 million to rebuilding the OBG
  • Remove the municipal net profit business filings from the Ohio Revised Code section 57 and reinstates it back into ORC 718.
  • Preserves the optional use of the OBG for business filers.
  • Removes the 1% service fee to municipalities.
  • Allows the Tax Commissioner to charge a user fee of up to one percent (1%) of the tax due on the return or one thousand dollars, whichever is less, to business filers that utilize the rebuilt portal.
  • Taxes collected through the Gateway are guaranteed to be distributed to municipalities at least bi-monthly.
  • Filings will continue to flow to municipalities through the Gateway preserving auditing and compliance authorities of municipalities.
  • The rebuilt Gateway is to be ready by Jan. 1, 2019.

Regarding the language to repeal the throwback rule, an omnibus amendment to the Budget will be adopted by the House Finance Committee next week and then the final proposal will be sent to the full House for a vote and then sent to the Senate.

The league has participated in interested parties meetings with legislators regarding consequences, intentional and unintentional, to the repeal proposal and we believe that language may be added to the omnibus amendment next week altering the "as introduced" version of this proposal.

The Senate will have a few short weeks to incorporate their changes before the Budget is passed. Please keep in touch with your legislators and ask for their support in preserving local control of municipal revenues and to not support budget changes that will further reduce local revenues.

Thank you for all your involvement in letting your members at the Statehouse know how important local control is to creating safe, prosperous communities. In Friday's regular bulletin, we will highlight other issues included in the House budget proposal that will impact Ohio cities and villages.

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