Posted: 12:00 a.m. Saturday, Dec. 29, 2012
By Terry Morris
Municipal income taxes are collected on wages and other compensation earned by residents of almost 600 Ohio cities and villages that impose a tax.
Those taxes are also applied to non-residents working in those cities and on the net profits of businesses.
According to a survey by the Ohio Legislative Service Commission, rates of taxation in 2010 ranged from 0.4 percent in Indian Hill, Hamilton County, to 3.0 percent in Parma Heights, Cuyahoga County.
Total municipal income tax revenue in the state was $4.05 billion in 2010, with $3.75 billion collected by cities, the rest by villages. The City of Columbus collected $651 million.
Those taxes are also applied to business net profits Impact of House Bill 601
Expired tax uniformity bill to return in legislative session
Provisions that would decrease municipal income tax revenues:
Allows businesses five years to carry forward deductions for net operating losses.
Increases from 12 to 20 the number of days per year an individual may work in a municipality before taxes can begin being withheld there
Removes alimony and child support received from taxable income
Excludes compensation for personal injuries or property damage from taxable income
Eliminates “throw-back” rule covering taxes on goods delivered in municipalities other than where a company is located
Provisions that would increase municipal income tax revenues:
Eliminates deductions for unreimbursed employee business expenses
Makes income for workers under 18 taxable
Ends tax exemption in cities where they serve but do not reside for legislators, legislative staff members, Supreme Court justices and some judges for taxes