Major Provisions of House Bill 5

Date: December 29, 2014

After a long and hard fought battle in the Ohio General
Assembly, House Bill 5, the bill to reform Ohio’s convoluted municipal income
tax structure finally cleared both chambers with bipartisan support in early December
and was signed into law on December 19 by Governor Kasich.

This was a top legislative priority for not only NFIB/Ohio
but the more than 30 members of the Municipal Tax Reform Coalition. The Coalition
represented a broad spectrum of business, industry and labor groups who understand
the need for municipal tax reform to not only simplify their members’ tax
compliance but also to enhance Ohio’s economic competitiveness.

Until passage, Ohio was the only state that permitted its
municipalities to construct their own set of rules for municipal taxation. With
nearly 600 different municipalities levying an income tax on individuals and
net profits, the cost of compliance was truly burdensome on small-business
owners. It was long overdue for Ohio to simply and establish a system as
uniform as possible.

“House Bill 5 represents a significant victory for
small-business owners across Ohio. We appreciate the strong support of both
chambers in recognizing the need to simplify the state’s municipal income tax system,”
said Chris Ferruso, Legislative Director of NFIB/Ohio.

“House Bill 5 goes a long way to reducing the frustration
our members face in trying to comply with Ohio’s cumbersome and archaic system.
The uniformity and simplification provisions included in the bill will allow
business owners to focus on job creation rather than spending too much time and
expense in understanding the various municipal tax codes.”

Click on the picture below for a listing of the major
provisions in the bill as prepared by the Ohio Society of CPAs.

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