House Bill 49 May Impact Those Filing Taxes in Multiple Locations

A taxpayer electing centralized collection and administration must do so by the first day of the third month after the beginning of the taxpayer's taxable year (or March 1 for calendar year taxpayers). The ability to elect to file on a centralized basis is available at the Ohio Municipal Tax website or by filing Form MNP R.

Recently Ohio has passed House Bill 49, which includes a provision implementing municipal tax reform for businesses and taxpayers filing returns in multiple municipalities. Through this reform, those taxpayers and businesses will be able to centrally file returns and pay municipal net profit taxes through the Ohio Business Gateway. This change should streamline the administrative process and ensure that businesses filing taxes in multiple municipalities have a more efficient method of compliance. This system will in no way reduce the amount of tax owed. Taxpayers can opt in through the Ohio Department of Taxation’s website on or before the first day of the third month after the beginning of the taxpayers fiscal year.

Additionally, Ohio has implemented the following final rules regarding the centralization of municipal net profits taxes:

Filing of Returns and Payments by Electronic Means: Effective January 12 taxpayers subject to municipal income taxation with respect to that taxpayers net profits from a business or profession are permitted to use the Ohio business Gateway to file a municipal net profile tax return, extension of a municipal net profit tax return, a declaration of estimated taxes or make payments.

Joint Economic Development Zones and Joint Economic Development Districts: The new provisions makes various changes to how a JEDD may be utilized, and provides some protection to businesses already operating in a proposed JEDD as well as finalizing the JEDD program going forward.

Changes in Taxable Year and Declaration of Estimated Taxes for Short Taxable Years: This provision finalizes the rules pertaining to short tax years and treatment of short tax years related to when a taxpayer becomes subject to and must pay municipal net profits tax.

Please contact your HBK representative with any questions or concerns.

About the Author(s)

Cassandra Baubie is an Associate at HBK CPAs & Consultants and is a member of its Tax Advisory Group (TAG).

Ms. Baubie joined HBK in 2017. She works in the firm’s Youngstown, Ohio office after earning a dual Bachelor of Arts degree in Legal Studies and Psychology from the State University of New York, The University at Buffalo and a Juris Doctorate from the University of Pittsburgh School of Law, where she also completed a Tax Law Certification. She graduated from both schools with high honors and spent a semester studying abroad in London, England, as well.

Ms. Baubie has experience in tax law research. Prior to joining HBK, she worked for, a global legal news organization, and was a member of the University of Pittsburgh Tax Law Review Journal. Ms. Baubie also worked for the University of Pittsburgh School of Law’s Low Income Tax Clinic where she performed IRS litigation and Tax Court work, and provided compliance work for low income individuals and businesses. She was an avid volunteer with the Olmsted Center for Sight in Buffalo.

Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.