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Will Ohio lawmakers change their local tax laws in the next legislative session?
Idaho

Will Ohio lawmakers change their local tax laws in the next legislative session?

COLUMBUS, Ohio (Statehouse News Bureau) — During the two-year legislative session, Ohio lawmakers have focused their tax efforts primarily on state-level taxes—rather than local tax laws—aside from the numerous property tax proposals they have introduced.

The Ohio Chamber of Commerce building from the outside.
The facade of the Ohio Chamber of Commerce building in downtown Columbus in August 2024. (Sarah Donaldson | Statehouse News Bureau)

However, a recent study by the Ohio Chamber of Commerce suggests there is a desire to restore greater focus on local tax legislation. The Chamber argues that these laws can be burdensome for businesses to manage.

Rick Carfagna, a leading Chamber of Commerce lobbyist and former Republican state legislator, said the different tax rates and required paperwork that come with local taxes could be a burden for businesses with employees in more than one county.

“We don’t want to eliminate local income taxes,” Carfagna said in an interview. “Nor do we want to tinker with the tax rates currently charged by municipalities or school districts. What we want to take another look at are the complexities involved in complying with business regulations.”

The state has not enacted any significant local tax laws in a decade.

Former Governor John Kasich signed House Bill 5 into law in December 2014, although some measures took more than a year to take effect. HB 5 made changes in everything from tax filing and refunds to administration, collection and enforcement.

Kent Scarrett, executive director of the Ohio Municipal League, said the last round was a net loss for municipalities. He is concerned about what may come, but said he thinks the state is due. About every 10 years, Scarrett said, “they (the legislatures) come back, look at it and make changes, and those changes are not revenue neutral.”

“We’ve definitely seen one of the largest business and advocacy groups in Cap Square, the Ohio Chamber of Commerce, continue to pursue their wish list and make their proposals more and more compelling,” Scarrett said in an interview.

According to a recent Chamber of Commerce study, the Ohio Tax Benchmarking Analysis, Ohio’s overall tax burden at the state and local level is in the middle of the pack when comparing comparable states. However, when it comes to the “most burdensome” local taxes, Ohio ranks second, with Texas taking first place.

The complete benchmarking analysis can be found here.

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